Asian and European stock markets experienced a significant increase after a US federal court stopped former President Donald Trump from implementing broad trade tariffs through emergency powers. The court determined Trump exceeded his legal authority because his tariff orders exceeded the limits established by the International Emergency Economic Powers Act (IEEPA).
A three-judge panel at the Court of International Trade issued the decision which condemned Trump’s unpredictable trade decisions. The court decision established that federal law prohibits the use of tariffs even though their effectiveness remains unchallenged.
The stock markets reacted positively to the ruling because it indicated that US trade policy would now operate with more stability and predictability. The business community welcomed this development because it brought an end to the trade uncertainties that characterized Trump’s presidency especially in industries exposed to tariff fluctuations.
The Trump administration has filed an appeal to challenge the judiciary’s authority in making national emergency decisions. A White House spokesperson argued that judges should refrain from making decisions about emergency powers. The market reaction to this decision has been positive as Tokyo and Frankfurt and London experienced stock market gains.
