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A federal trade court delivered a sharp rebuke to former President Donald Trump’s sweeping tariff policy, ruling that his administration lacked legal authority to impose duties on all imported goods. This was a core feature of his trade war strategy during and after his presidency.
In a decision handed down Wednesday, the U.S. Court of International Trade vacated Trump’s broad-based tariffs. It permanently enjoined their enforcement, clouding one of his signature economic initiatives.
“The challenged Tariff Orders will be vacated and their operation permanently enjoined,” the three-judge panel wrote strongly, suggesting the former president’s actions violated statutory limits on executive trade authority.
The ruling arrives at a pivotal moment in Washington. Trump, now a prominent political force as a potential 2026 GOP frontrunner, has vowed to double down on protectionist policies if re-elected. The White House confirmed Wednesday that it intends to appeal the court’s decision, signaling that the legal battle is far from over.
Divided Response on the Hill
Earlier in the day, House Speaker Mike Johnson (R-La.) sought to reassure Republicans who were uneasy about Trump’s influence over the party’s economic agenda. In comments to reporters, Johnson said Congress was reviewing its legislative options and called for “a balanced approach to global trade.”
The legal development also sparked a rare criticism from Elon Musk, who, in an interview with CBS News, said the recent trade package passed by the House was “disappointing.” The Tesla and SpaceX CEO claimed the legislation “increases the budget deficit, not decreases it” and undermines the fiscal restraint promoted by the DOGE team, a private-sector initiative Musk has championed to streamline federal spending.
Market and Business Reactions
Financial markets reacted with modest volatility, with import-heavy sectors seeing short-term gains amid speculation that the ruling could ease global trade tensions. Multinational retailers, electronics importers, and the automotive industry welcomed the court’s decision, citing reduced compliance burdens and cost pressures.
Business groups such as the U.S. Chamber of Commerce and National Retail Federation applauded the ruling, calling it a “long-overdue correction” to an economically destabilizing policy.
What’s Next?
Legal analysts suggest the case could eventually reach the Supreme Court, especially given its implications for presidential authority in trade policy. A successful appeal by the White House could revalidate broad executive leeway, while failure could limit the next president’s ability to act unilaterally on tariffs.
For now, the court’s decision halts Trump’s tariff orders entirely, which is an extraordinary legal intervention with ripple effects across U.S. trade, fiscal policy, and the 2026 election landscape.
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