US stocks rose sharply and gold fell sharply! The US Court of International Trade prevents

Source: Wall Street News

### Court Deals Major Blow to Trump's Tariff Strategy, First Judicial Challenge to IEEPA Boundaries  

According to CCTV News, on May 28 local time, a U.S. federal court blocked the tariff policy announced by President Trump on April 2, ruling that Trump overstepped his authority by imposing comprehensive tariffs on countries with trade surpluses with the U.S.  

Following the news, futures for the three major U.S. stock indices surged, all rising over 1%.  

Spot gold fell sharply by $30 intraday, down 0.9% to $3,259 per ounce.  

The U.S. dollar index rose over 0.5%.  

### Overlooked Major Positive Emerges  

As Wall Street News previously noted, while attention was focused on the June 1 tariff deadline and Trump's "trade showdown" with the EU, this ruling by the U.S. Court of International Trade may be an underappreciated potential positive for markets.  

Reports indicate that the New York-based court explicitly stated in its ruling that Trump's declaration of trade deficits as a "national emergency" under the **International Emergency Economic Powers Act (IEEPA)** and subsequent tariff impositions exceeded legal authority.  

The court emphasized that the Constitution grants Congress exclusive power to regulate foreign trade, and presidential emergency powers cannot override this.  

The ruling stemmed from two lawsuits: one filed by the nonpartisan Liberty Justice Center on behalf of five small U.S. businesses, and another by a coalition of 13 states including Oregon. The affected businesses spanned industries from New York alcohol importers to Virginia-based educational tool manufacturers, all arguing that the tariffs would severely harm their operations.  

Among the numerous lawsuits Trump has faced over executive orders, this decision marks one of his most significant courtroom defeats as he tests the limits of presidential power.  

The ruling can be appealed to the U.S. Court of Appeals for the Federal Circuit and potentially escalated to the Supreme Court. At least five other legal challenges to these tariffs are currently pending.  

Latest updates indicate Trump has decided to appeal the trade court's ruling.  

Analysts note that if Trump loses, while the White House may attempt to achieve similar goals through other legal means, no other law provides the president with as broad and nearly unchecked authority as IEEPA. This also means that if the court issues an injunction, the already implemented 10% comprehensive tariffs and pending reciprocal tariffs would be halted, potentially reshaping ongoing tense negotiations with the EU, Japan, India, and others.  

### Can This Little-Known Trade Court Alter the Course of the Trade War?  

The U.S. Court of International Trade, which has nationwide jurisdiction over tariff and trade disputes, operates largely in obscurity, rarely mentioned in major publications, and is unfamiliar even to most lawyers.  

Lawrence Friedman, a partner at Richardson & Colburn LLP, noted:  

"Most lawyers graduate from law school without knowing this court exists."  

The case was heard by a three-judge panel, including Timothy Reif (former USTR General Counsel under Obama), the academically rigorous Gary Katzmann, and veteran judge Jane Restani (appointed by Reagan). Given the constitutional separation of powers at stake, such cases are typically handled with exceptional caution.  

Regardless of whether the court ultimately issues an injunction, its ruling will set an important precedent for future presidential use of IEEPA.  

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