Editor’s Note: This story has been updated to include the latest details

A federal court struck down global tariffs imposed by President Donald Trump under the International Emergency Economic Powers Act on Wednesday. This ruling could significantly impact the administration’s trade strategies.

What Happened: The federal court has ruled against Trump’s authority to impose extensive global tariffs under the IEEPA, according to a report by Axios. The decision, delivered by the U.S. Court of International Trade, could potentially halt the administration’s trade war efforts.

The court’s ruling, which emerged from two separate cases, nullifies the tariffs Trump had enforced using the 1977 IEEPA law, a statute never previously applied in tariff situations. Businesses and states had challenged the tariffs, arguing they violated the Constitution’s allocation of import duty authority to Congress.

The three-judge panel, comprising appointees from the Reagan, Obama, and Trump administrations, stated that IEEPA does not grant the president unlimited tariff-imposing powers. Consequently, the court vacated the challenged tariff orders and permanently enjoined their operation.

Axios noted that the court bypassed motions for an injunction, directly issuing a judgment that IEEPA did not authorize the “Worldwide, Retaliatory or Trafficking” orders. The White House has yet to comment on the ruling.

“The challenged Tariff Orders will be vacated and their operation permanently enjoined,” wrote the court in its ruling, according to the report.

The decision could lead to confusion at U.S. ports and impact markets as businesses await the administration’s next steps and potential higher court interventions.

The Trump administration filed an appeal against the ruling in minutes, according to a Reuters report.

See Also: Stock Market Is Pricing A Never-Before-Seen ‘Divergence’ As Equities And Bonds ‘Run It Hot’ Amid Gloomy Outlook By Bottom-Up Analysts

Why It Matters: This ruling follows a series of aggressive trade measures by Trump, including the introduction of a reciprocal tariff structure in early April 2025. The president announced these tariffs as part of a broader strategy to redefine America’s trade relationships, dubbing it “our Declaration of Economic Independence.”

The economic impact of these tariffs was immediate and profound. The U.S. stock market experienced a significant downturn, with a $5 trillion loss in market capitalization over just two days following the tariff announcement.

Photo Courtesy: Joey Sussman on Shutterstock.com

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• Stock Market Is Pricing A Never-Before-Seen ‘Divergence’ As Equities And Bonds ‘Run It Hot’ Amid Gloomy Outlook By Bottom-Up Analysts

This story was generated using Benzinga Neuro and edited by Shivdeep Dhaliwal