US Court Ruling Strikes Down Trump-Era Tariffs, Sparks Trade War Uncertainty

A recent ruling by the U.S. Court of International Trade has declared tariffs imposed by the Trump administration on countries like China, Canada, and Mexico illegal. The court cited an overreach of presidential power in implementing the reciprocal tariffs.

If the ruling stands, according to Kobeissi Letter, all tariffs collected since April 2nd would have to be refunded. The Trump administration has appealed the decision, potentially setting the stage for a showdown in the U.S. Supreme Court.

Court Blocks “Day of Liberation” Tariffs

Reuters reports that the Court of International Trade blocked the reciprocal tariffs, which were announced on what was termed “Day of Liberation.” The court determined that the president exceeded his authority by imposing broad tariffs on imports from U.S. trading partners.

“The Court of International Trade said the U.S. Constitution grants Congress the exclusive authority to regulate commerce with other countries, which is not overridden by the president’s emergency powers to safeguard the U.S. economy,” Reuters reports.

The three-judge panel issued a permanent restraining order on the blanket tariff orders issued by Trump since January and ordered new orders reflecting the permanent restriction to be issued within 10 days. The Trump administration has appealed the decision.

Markets reacted positively to the news, with the U.S. dollar strengthening and global stocks rising amid optimism about reduced trade friction. However, risk assets like Bitcoin did not rally, falling slightly after reaching a new all-time high of $111,980 the previous week.

What’s Next?

The Kobeissi Letter highlights that if the Court of International Trade’s decision on reciprocal tariffs is upheld, “all tariffs collected since April 2nd would have to be refunded.”

The report estimates that this refund would cost approximately $10 billion in tariff revenue based on 2024 levels, including the base 10% tariff on all countries, as well as higher rates imposed on certain nations.

“The U.S. would owe China alone a refund of approximately $3.5 billion,” says an analyst from Kobeissi.

Looking at the short-term outlook for Bitcoin, the decision could be positive as it helps improve market sentiment due to reduced trade tensions. However, traders should be cautious of price volatility.

• Key Takeaway: The US Court of International Trade has ruled Trump-era tariffs illegal.
• Potential Impact: Could lead to billions in refunds and a Supreme Court battle.
• Market Reaction: Positive for stocks and the dollar, but not for Bitcoin.

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