How It’s Going

It’s now Marxist to understand that the Constitution only authorizes Congress to impose tariffs. pic.twitter.com/qMVvSoFw4u

— Ron Filipkowski (@RonFilipkowski) May 28, 2025

On Wednesday evening, a panel of judges at the US Court of International Trade took aim at Trump's trade agenda, blocking global tariffs imposed citing emergency powers on the grounds that they are illegal. The decision can be appealed by the Trump administration in federal court.

Nvidia beat expectations on revenue but fell short on adjusted earnings per share (EPS) due to the impact of the US government's ban on the sale of its H20 chips to China. The company also warned that it expects to miss out on $8 billion in sales in the next quarter due to the restriction.

Despite the chip giant's complications in China, Nvidia shares jumped in after-hours trading.

In the company's earnings call, CEO Jensen Huang criticized US chip curbs, saying they have spurred innovation among rivals in China and weaken America's position. "China's AI moves on with or without US chips," Huang said. "The question is whether one of the world's largest AI markets will run on American platforms."

Overall, however, Nvidia's performance on Wednesday boosted hopes on Wall Street that Big Tech can weather President Trump's far-reaching trade policy.

So, like Axios, let’s “zoom in”:

Zoom in: "The question in the two cases before the court is whether the International Emergency Economic Powers Act of 1977 ("IEEPA") delegates these powers to the President in the form of authority to impose unlimited tariffs on goods from nearly every country in the world," the three-judge panel wrote.

"The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder."

Tariffs imposed under a different legal authority called Section 232 — including on imports of autos, steel and aluminum — are unaffected by the ruling.

But the interesting bit is, the court swept away the plaintiffs’ motion for a temporary injunction and went straight to a final ruling:

The court skipped over the plaintiffs' motions for an injunction and went directly to issuing a judgment, saying IEEPA did not authorize any of the "Worldwide, Retaliatory or Trafficking" orders.

"The challenged Tariff Orders will be vacated and their operation permanently enjoined," the court wrote.

Let me put that in context:

The Trump administration argued that US federal courts must accept presidential claims of "emergency" at face value, no matter how manifestly nonsensical and in bad faith those claims in fact are. The US Court of International Trade said, in effect, "not so fast."

— David Frum (@davidfrum) May 28, 2025

No, the Court of Trade jumped straight to: “Who do you think you’re fucking with?” That’s what the court meant by going straight to summary judgment.

Of course, the fallout it doesn’t stop there:

What to watch: With tariffed goods arriving at U.S. ports every day, the confusion over what's in force and what to charge could throw imports into chaos.

Markets, and businesses, will likely be paying rapt attention in coming days to how the administration responds and whether higher courts intervene.

"(It) gives foreign governments - once compelled to negotiate new terms of the trade agreements the Trump administration broke - significant new leverage in ongoing trade talks," said Scott Lincicome, vice president of the Cato Institute's Stiefel Center for Trade Policy Studies, in a statement.

Bright readers will recall that the Supremes suggested the proper review of Trump’s tariffs would start in the Court of International Trade. So now that process has begun. I don’t think Trump does well on appeal, but who knows? The next question is whether or not the appeals court stays the judgement on appeal. That will be an indicator of what the immediate future holds.

My guess is: no stay. On the trade front? TACO battling it out with ETTD, with utter chaos waiting to tag in.

All that Republicans have to do now is pass all the Trump tariffs in Congress. They haven’t said much in opposition to them so passing that should be no problem. Let’s get it to the floor and see where everyone stands on it. Think of it as a test of MAGA loyalty.

— Ron Filipkowski (@RonFilipkowski) May 29, 2025

May you live in interesting times.