U.S. Court Overturns Trump Tariffs, Sparks Treasury Yield Surge and Market Volatility

A federal court ruling invalidating former President Trump’s tariffs has sent shockwaves through financial markets. The U.S. Court of International Trade found the levies violated federal law, triggering an immediate 5% spike in 30-year Treasury yields and strengthening the dollar as investors fled to safety.

The decision specifically targeted tariffs imposed under emergency powers, though steel and vehicle duties remain unaffected. Market reaction was swift: the 10-year Treasury yield jumped 10 basis points to 4.50% while the Dollar Index breached 100. Analysts warn the ruling could undermine ongoing trade negotiations and create legal uncertainty.

While the administration has appealed the decision, calling it an overreach of judicial authority, markets continue to price in the potential for renewed trade tensions. The court gave the government ten days to issue new tariff guidance pending appeal, setting up a potential showdown between executive power and judicial oversight.