U.S. Court Blocks Trump’s ‘Liberation Day’ Tariffs: Implications for Trade and Crypto Markets

The U.S. Court of International Trade has blocked portions of former President Donald Trump’s “Liberation Day” tariffs initiative, announced earlier in April, aimed at imposing a baseline 10% tariff on all imports to address foreign trade barriers against U.S. goods.

The ruling signifies a temporary setback in Trump’s plan to adjust international trade dynamics, as the court finds the former president overstepped his authority under the International Emergency Economic Powers Act. According to the U.S. Court of International Trade, “The Constitution assigns Congress the exclusive powers to ‘lay and collect Taxes, Duties, Imposts and Excises,’ and to ‘regulate Commerce with foreign Nations.’ The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder.”

A U.S. political economist at Goldman Sachs, Alec Phillips, commented that the ruling serves as only a temporary roadblock. The U.S. futures market experienced a rally of up to 2.3% after the announcement. Investors appear relieved by the court’s decision, perceiving a reduction in trade tensions.

The blocked tariffs have left lawmakers and financial markets assessing the potential fiscal and economic impact, with limited dependency on tariff revenue for congressional fiscal measures, according to reports from Goldman Sachs.

Risks arising from macroeconomic changes could affect cryptocurrencies like BTC and ETH, although immediate market shifts in these digital assets were not observed. Trends in trade policy often influence capital flows and risk appetite, impacting global markets.

Future policy actions remain on the table, including Section 122 tariffs and Section 301 investigations. The court’s decision highlights the legislative boundaries of trade powers, underscoring Congress’s role in overseeing trade and tariff policies.