A U.S. trade court has blocked most of President Donald Trump’s sweeping tariffs, ruling they exceed his legal authority. Markets reacted immediately to the decision. U.S. stock futures rose between 1.2% and 2%, while the dollar gained value against safe-haven currencies like the yen. The Trump administration announced it would appeal the ruling.

A federal court in New York delivered a significant blow to President Donald Trump’s trade agenda on May 28, 2025, by blocking the majority of his global tariffs, including the “Liberation Day” levies imposed on April 2. The U.S. Court of International Trade, in a ruling by a three-judge panel, determined that Trump overstepped his authority under the International Emergency Economic Powers Act (IEEPA) of 1977, which he used to justify the tariffs as a response to a declared national emergency. The decision, which halts a 10% baseline tariff on most imports, 30% tariffs on China, and 25% tariffs on goods from Mexico and Canada, could reshape global trade dynamics and lower costs for the U.S. feed industry, which relies heavily on imported ingredients.

The court’s ruling stemmed from two consolidated lawsuits, one filed by a group of small U.S. businesses, including a New York liquor importer, and another by 12 state attorneys general, led by Arizona and Oregon. The plaintiffs argued that the IEEPA does not grant the president “unbounded tariff authority” and that persistent trade deficits do not constitute an emergency. “We instead read IEEPA’s provisions to impose meaningful limits on any such authority it confers,” the judges wrote, emphasizing that only Congress holds the constitutional power to regulate commerce with foreign nations. The decision does not affect tariffs on steel, aluminum, and autos imposed under Section 232 of the Trade Expansion Act of 1962, which remain in place.

FEED INDUSTRY RELIEF

For the feed industry, the ruling offers temporary relief from rising costs tied to Trump’s tariffs, which had increased prices for imported feed additives, grains, and equipment. The 10% universal tariff and higher duties on key trading partners like Canada and Mexico had strained supply chains, particularly for soybean meal and other feed components sourced internationally. However, the Trump administration swiftly appealed the decision, signaling a prolonged legal battle that could reach the U.S. Court of Appeals for the Federal Circuit and potentially the Supreme Court. “It is not for unelected judges to decide how to properly address a national emergency,” said White House spokesperson Kush Desai, defending the tariffs as critical to addressing trade deficits that “have decimated American communities, left our workers behind, and weakened our defense industrial base.”

Market reactions were immediate, with U.S. stock futures jumping 1.2% to 2% and the dollar gaining against safe-haven currencies like the yen, reflecting optimism for resumed global trade flows. Feed industry stakeholders, however, remain cautious, as the appeal process could reinstate the tariffs or prompt Trump to seek alternative measures. “The assumption is that the tariffs that have been announced and are in place will stay in place… Our assumption is President Trump will appeal this trade court’s decision,” noted analysts, highlighting the uncertainty ahead. The court has set a 10-day window for administrative orders to enforce the permanent injunction, leaving businesses to navigate a complex trade landscape in the interim.

GEOPOLITICAL AND MARKET IMPACTS

The ruling also has geopolitical implications, as Trump’s tariffs were credited with pressuring China into trade concessions and fostering a ceasefire between India and Pakistan. Commerce Secretary Howard Lutnick argued that limiting Trump’s tariff powers could “destroy the carefully crafted China trade agreement” and reduce incentives for foreign counterparts to negotiate. For feed industry leaders, the decision underscores the need to diversify supply chains and monitor trade policy developments closely, as prolonged uncertainty could disrupt planning and pricing strategies.