(Sharecast News) - A US court has blocked Donald Trump's sweeping tariff regime, after it ruled that the president had exceeded his authority.
In a major blow to Trump's core economic policy, the US Court of International Trade ruled late on Wednesday that Congress alone had exclusive authority to regulate commerce with other countries, and that presidential powers to safeguard the economy did not overrule that.

The ruling invalidates most of Trump's tariffs with immediate effect. The administration has been given ten days to dismantle the regime.

Markets rallied following the judgement and the dollar strengthened.

The White House said it would appeal, however, and claimed it was "not for unelected judges to decide how to properly address a national emergency".

A spokesperson continued: "President Trump pledged to put America first, and the Administration is committed to using every lever of executive power to address this crisis."

Trump unveiled his sweeping tariff regime on 2 April, upending markets and sending shockwaves through global trade. A number of major trading partners, including the European Union and China, imposed their own reciprocal duties in response.

Trump argued he was able to impose the swingeing taxes - including a baseline 10% on all countries - without the approval of Congress under the International Emergency Economic Powers Act (IEEPA). The act gives the US president authority to address "unusual and extraordinary" threats during a national emergency.

But the New York court's three judges found that Trump's "worldwide and retaliatory tariff orders exceed any authority granted to the president by IEEPA".

The ruling could also see the various trade talks the US is holding worldwide grind to a halt.

The case, which did not address tariffs on cars, steel or automobiles, was brought by a number of US states and small businesses. The White House used another statue to impose sector-specific tariffs, and so remain unaffected by the court's ruling.

Russ Mould, investment director at AJ Bell, said: "For the court to determine that Trump did not have the authority to impose the 'Liberation Day' tariffs is a pretty seismic development.

"That the [market] gains were measured rather than blockbuster reflects a healthy level of scepticism over whether this can truly rein in the Trump administration.

"The problem for investors is it could prolong uncertainty even if, ultimately, it results in a better outcome from a market perspective. It also exacerbates the issue of how big tax cuts being brought forward in the US will be funded, give revenue from tariffs was supposed to help on this front."

Rabobank said: "While stock pickers are clearly cheered by this news, we see it unlikely it will do much to boost confidence on Main Street. This is owing to the fact that it does nothing to dispel the elevated level of uncertainty, which is only likely to encourage corporates to sit on their hands when it comes to investment and hiring decisions."

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