(NEW YORK) — Stocks surged at the open of trading on Thursday after a panel of federal judges blocked President Donald Trump from slapping some of his far-reaching tariffs on China and other major U.S. trading partners.
The Dow Jones Industrial Average jumped 55 points, or 0.1%, while the S&P 500 increased 0.8%. The tech-heavy Nasdaq climbed 1.4%
The ruling from the U.S. Court of International Trade late Wednesday marked a major blow for Trump’s tariff policy, invalidating levies on dozens of countries unveiled in a Rose Garden ceremony that Trump had dubbed “Liberation Day.”
Trump later paused those so-called “reciprocal tariffs” for 90 days, embarking on trade negotiations with the target nations that remain ongoing.
A separate set of tariffs focused on Mexico and Canada over their alleged role in the fentanyl trade also fell victim to the court’s ruling.
The Trump administration appealed the ruling within minutes, leaving the ultimate fate of the tariffs unclear.
The ruling centered on Trump’s unprecedented invocation of the International Economic Emergency Powers Act as a legal justification for tariffs.
The 1977 law allows the president to stop all transactions with a foreign adversary that poses a threat, including the use of tools like sanctions and trade embargoes. But the measure does not explicitly permit tariffs, putting Trump in untested legal territory.
The ruling afforded the Trump administration as many as 10 days to halt the tariffs.
Even before the court’s decision, Trump had rolled back some of the levies at issue.
A trade agreement between the U.S. and China earlier this month slashed tit-for-tat tariffs between the world’s two largest economies and triggered a surge in the stock market. Within days, Wall Street firms softened their forecasts of a recession.
The U.S.-China accord came weeks after the White House paused the reciprocal tariffs. Trump eased duties on some goods from Mexico and Canada.
The ruling did not impact sector-specific tariffs used under separate legal statutes, including levies targeting autos, steel and aluminum.
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