Donald Trump dealt catastrophic tariffs blow as court rules trade levies 'illegal'

The court agreed with the challengers, prohibiting most of the trade restrictions that Trump has announced since assuming office.

The Court of International Trade determined that Trump had exceeded any authority granted under the 1977 International Emergency Economic Powers Act when imposing the sweeping trade restrictions.

It found that any interpretation of the emergency powers legislation that "delegates unlimited tariff authority is unconstitutional," according to court documents.

The ruling specifically targeted the comprehensive 10 per cent tariffs imposed on virtually every US trading partner last month, along with higher duties threatened against dozens of countries.

Asian shares continued to rise, and US futures surged immediately following the court's decision, with markets responding positively to the prospect of tariff relief.

The future for the S&P 500 climbed 1.6 per cent, whilst that for the Dow Jones Industrial Average gained 1.2 per cent.

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The White House condemned the ruling as judicial overreach, with officials launching a fierce attack on what they termed "unelected judges" interfering in executive authority.

White House spokesman Kush Desai said: "Foreign countries' nonreciprocal treatment of the United States has fuelled America's historic and persistent trade deficits.

"These deficits have created a national emergency that has decimated American communities, left our workers behind, and weakened our defence industrial base, facts that the court did not dispute. It is not for unelected judges to decide how to properly address a national emergency.

"President Trump pledged to put America First, and the Administration is committed to using every lever of executive power to address this crisis and restore American Greatness."

Stephen Miller, one of Trump's closest White House aides, was more combative on social media, denouncing what he called a "judicial coup" that was "out of control".

The Trump administration is expected to appeal the decision, with the legal battle likely heading to the Supreme Court.

The legal challenge originated from several lawsuits filed by Democratic-led states and a coalition of small businesses arguing that Trump's tariff actions violated the constitutional separation of powers.

The challengers contended that the President had wrongfully invoked emergency legislation to justify the comprehensive trade restrictions.