U.S. Court Delivers a Blow to Donald Trump’s Tariff Authority

A U.S. court blocked Donald Trump’s “reciprocal” tariffs, denouncing an overreach of power. This decision reignites trade tensions, especially with China, which demands their cancellation. Meanwhile, global markets responded positively, highlighting a major challenge concerning the separation of powers.

The judicial decision highlights the limits of executive power

More than a month after Donald Trump triggered the market drop following the tariff announcement, the United States International Trade Commission (ITC) ruled that Trump exceeded his powers by imposing massive tariffs by decree affecting Canada, Mexico, and China. Relying on the Economic Emergency Act of 1977 (IEEPA), Donald Trump tried to justify these measures. However, the judges recall in the official document that this law only permits targeted sanctions in response to an “extraordinary and unusual” threat, thereby excluding the establishment of an unlimited surtax on global imports.

Consequently, this illegitimate interpretation grants the president unconstitutional authority, since legislative power belongs to Congress. In other words, Donald Trump attempted to usurp a power reserved by the Constitution for another actor, thus endangering the institutional balance that guarantees American democracy.

Exacerbated political and diplomatic reactions

Faced with this setback from the U.S. court that dealt Trump a blow, the White House denounced the decision, calling the judges “unelected” and incapable of managing a “national emergency”. This rhetoric reinforces the idea of an institutional standoff that goes beyond the mere tariff issue, crystallizing tensions over American governance.

Simultaneously, China intensifies its criticism by accusing the United States of destructive protectionism that:

• Disrupts the global trade order;
• Harms consumers;
• Negatively impacts the American economy.

Moreover, Beijing calls on Washington to “fully cancel these unjustified unilateral tariffs”.

These reactions reflect a tense international climate where:

• Donald Trump’s protectionist measures become political and commercial stakes;
• Trade diplomacy is weakened;
• The risk of escalation threatens global economic stability.

Market reactions to Donald Trump’s legal setback

Despite political uncertainty, the court decision sparked genuine relief in financial markets:

• Tokyo Stock Exchange rose nearly 2%;
• The dollar gained 0.8% against the yen;
• The dollar advanced 0.5% against the euro.

Conversely, bitcoin (BTC), currently trading at $107,600, has not yet responded positively to this decision.

Beyond the commercial issue, this case reminds us that even Donald Trump must respect constitutional limits, highlighting the importance of strict checks on powers to preserve democracy.

This decision comes as protectionist measures, such as Donald Trump’s double tariffs, raise concerns. In this respect, JPMorgan revises the probability of recession upward to 60%. The challenge is clear: will the United States succeed in combining economic rigor with respect for institutions to avoid a major crisis?