US Court Invalidates Trump’s Reciprocal Tariff

Thursday, May 29th, 2025

World Events — US Court Invalidates Trump’s Reciprocal Tariff

FT

A panel of judges on the US Court of International Trade has invalidated Donald Trump’s sweeping “reciprocal” tariffs, ruling that the president lacked the authority to impose such levies using the International Emergency Economic Powers Act (IEEPA), the legislation he cited to justify the tariffs. The court found that Trump’s executive orders, which introduced a 10% baseline tariff on most imports and higher duties on countries with large trade surpluses, exceeded the powers granted to the president by both the Constitution and IEEPA, emphasizing that only Congress has the authority to regulate tariffs and commerce with foreign nations. The decision, which came in response to lawsuits from US businesses and a coalition of states, ordered the removal of the tariffs and criticized the administration’s argument that broad national emergency powers justified the levies, stating that such use of IEEPA was impermissible unless there was a genuine and extraordinary threat to national security. The White House has announced plans to appeal, but for now, the ruling represents a significant setback for Trump’s trade policy and emboldens critics who argue the tariffs harmed US businesses and consumers.

Tech — Nvidia’s CEO Warns That China’s AI Is Now “Formidable” 

Bloomberg

Nvidia CEO Jensen Huang has warned that Chinese AI rivals, particularly Huawei, have become “formidable” as US export restrictions have effectively locked Nvidia out of the Chinese market, leading to an expected $8 billion loss in sales this quarter. Huang noted that these restrictions are accelerating the progress of Chinese AI firms, with Huawei’s latest AI chip now matching the performance of Nvidia’s H200, and the gap between US and Chinese products is narrowing rapidly. He criticized the effectiveness of US export controls, arguing that instead of keeping advanced AI technology out of China, local companies are simply developing competitive alternatives, and major Chinese buyers like Tencent are increasingly sourcing from domestic suppliers. Emphasizing China’s importance as the world’s largest hub of AI researchers, Huang urged that the US should not underestimate the market’s significance and called for a reconsideration of the current curbs.

Business — Nvidia’s Revenue Surge by Nearly 70% Despite China Curb 

Nvidia reported a 69% year-on-year surge in quarterly revenue to $44.1 billion, beating Wall Street expectations despite taking a $4.5 billion charge and missing out on an additional $2.5 billion in sales due to new US export restrictions on AI chips to China. The company expects an $8 billion revenue loss from China in the current quarter as a result of these curbs, which have effectively closed off the $50 billion Chinese market to US chipmakers. CEO Jensen Huang criticized the export controls, arguing they only strengthen Chinese competitors and that the belief China cannot develop its own AI chips is “clearly wrong,” while also noting Nvidia is exploring limited ways to compete in China, potentially with a modified Blackwell chip. Despite these challenges, Nvidia’s share price rose more than 4% after the announcement, reflecting continued strong global demand for its AI products and a robust outlook, with the company forecasting $45 billion in revenue for the current quarter.

Society —  Pausing Foreign Applications to US Universities Is a Horrible Idea 

The Economists

The Trump administration’s decision to pause all new student visa interviews for foreign applicants, pending expanded social media vetting, has drawn sharp criticism for undermining one of America’s most successful exports: higher education. This move, intended as part of a broader crackdown on immigration and campus activism, threatens to severely slow visa processing and deter international students—who not only subsidize domestic tuition but also enhance the intellectual and cultural dynamism of US universities—from applying. Universities across the country, which rely heavily on foreign students for both financial stability and global prestige, warn that such policies will damage America’s long-standing ability to attract top global talent and weaken its soft power. Critics argue that, while concerns about campus unrest and national security are valid, blanket restrictions and intrusive vetting risk making US higher education less competitive, less innovative, and less welcoming, ultimately harming the country’s global standing and economic interests. 

The Daily Spark 

Data center construction added one percentage point to GDP growth in the first quarter, see chart above. This will be a strong tailwind to US economic growth over the coming years.

Song Rec —  Air (Gryffin x Julia Michaels) 

Quote of the Day 

“Care about what other people think and you will always be their prisoner.” ― Lao Tzu