A U.S. federal trade court ruled that Trump exceeded his authority by imposing sweeping global tariffs under emergency powers, declaring the measures unlawful.

A U.S. federal trade court ruled on Wednesday that President Donald Trump overstepped his legal authority by imposing sweeping global tariffs. The court declared the measures unlawful and sent equity markets higher while safe-haven assets slipped.

The U.S. Dollar Index gained 0.52% to 100.40 in Wednesday’s trading session following the court decision against Trump's tariffs. Spot gold prices dropped 0.78% to $3,263.13 due to reduced demand for safe-haven assets.

S&P 500 futures rose 1.6%, Nasdaq 100 futures gained 2%, and Dow futures spiked 1.2% at 9:00 p.m. ET.

According to the U.S. Court of International Trade, the 1977 International Emergency Economic Powers Act (IEEPA) does not allow presidential trade regulation through tariffs without congressional approval when applied to impose a 10% duty on most imports.

The judges ordered the tariffs “vacated and their operation permanently enjoined.”

The ruling comes in response to legal action brought by five U.S. companies dependent on imports, but the court said the decision applies universally, not just to the plaintiffs. 

“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA,” the court wrote.

Trump had announced the tariffs on April 2, calling them “Liberation Day” measures designed to address nonreciprocal trade practices and persistent U.S. trade deficits. 

A 90-day pause was announced on April 9, but the 10% baseline tariff was retained.

The Trump administration filed an immediate appeal, defending the tariffs as necessary to address what it described as a national economic emergency. 

“It is not for unelected judges to decide how to properly address a national emergency,” White House spokesperson Kush Desai said.

The SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500, is up 0.5% year-to-date, while the Invesco QQQ Trust, Series 1 (QQQ), which tracks the Nasdaq-100, has gained 1.7%. Meanwhile, the SPDR Dow Jones Industrial Average ETF Trust (DIA) is down 0.6%.

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