A US federal appeals court on Friday ruled that most tariffs imposed by president Donald Trump under emergency powers were illegal, striking at the heart of his trade policy and setting up a likely battle in the Supreme Court .
The ruling by the US court of appeals for the federal circuit in Washington, DC, covered two sets of tariffs - Trump’s “reciprocal” duties imposed in April as part of his trade war and another set announced in February against China, Canada and Mexico. It does not affect other tariffs Trump imposed under separate statutes, including those on steel and aluminum imports.
In a 7-4 judgement the court observed: “The statute bestows significant authority on the President to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax,” as quoted by Reuters.
The decision also said Trump had exceeded his authority under the International Emergency Economic Powers Act (IEEPA).
Trump had invoked IEEPA, a 1977 law historically used for sanctions and asset freezes, to justify tariffs by declaring a national emergency over persistent US trade deficits and cross-border drug flows. The administration argued that the law’s power to “regulate” imports extended to tariffs.
The appeals court rejected that view, saying: “It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs. The statute neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the President’s power to impose tariffs.”
The appeals court put its ruling on hold until October 14, allowing the Trump administration time to seek a reversal from the Supreme Court.
Minutes after the ruling, President Donald Trump sharply criticised the judgement, saying if allowed it would be a “ total disaster for the Country”.
In a post on his social media platform Truth Social, he attacked the appeals courts as "Highly Partisan" and asserted that the Supreme Court would rule in his favour.
“If these Tariffs ever went away, it would be a total disaster for the Country,” Trump wrote in his post. “If allowed to stand, this Decision would literally destroy the United States of America.”
“The President’s tariffs remain in effect, and we look forward to ultimate victory on this matter,” White House spokesman Kush Desai said in a separate statement, as quoted by CNBC.
Trump has relied heavily on tariffs in his second term, using them as a central tool of US foreign policy to pressure trading partners and push for revised trade agreements. While the duties have helped his administration secure economic concessions, they have also added to uncertainty in financial markets.
The lawsuits were filed separately by five small US businesses and a coalition of 12 Democratic-led states, who argued that under the Constitution, the power to issue taxes and tariffs lies with Congress and any delegation of that authority must be both explicit and limited.
Trump had defended the tariffs as a way to rebalance global trade and protect US industries. He said the April tariffs were necessary because the US had imported more than it exported for decades, undermining manufacturing and military readiness.
He also said the February tariffs against China, Canada and Mexico were justified because those countries were not doing enough to curb the flow of illegal fentanyl into the US - an assertion those governments have denied.
The New York-based US Court of international trade had earlier ruled against Trump’s tariff policies on May 28, saying the president had exceeded his powers when imposing both sets of challenged tariffs. That three-judge panel included one judge appointed by Trump during his first term. Another court in Washington also found that IEEPA does not authorize tariffs, with the government appealing that decision.
According to Reuters, at least eight lawsuits have been filed against Trump’s tariff measures, including one brought by the state of California.
While the latest decision restricts tariffs imposed under IEEPA, it leaves intact those imposed under other legal authorities. The Justice Department is expected to appeal, with the case likely headed to the US Supreme Court.
The ruling by the US court of appeals for the federal circuit in Washington, DC, covered two sets of tariffs - Trump’s “reciprocal” duties imposed in April as part of his trade war and another set announced in February against China, Canada and Mexico. It does not affect other tariffs Trump imposed under separate statutes, including those on steel and aluminum imports.
In a 7-4 judgement the court observed: “The statute bestows significant authority on the President to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax,” as quoted by Reuters.
The decision also said Trump had exceeded his authority under the International Emergency Economic Powers Act (IEEPA).
Trump had invoked IEEPA, a 1977 law historically used for sanctions and asset freezes, to justify tariffs by declaring a national emergency over persistent US trade deficits and cross-border drug flows. The administration argued that the law’s power to “regulate” imports extended to tariffs.
The appeals court rejected that view, saying: “It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs. The statute neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the President’s power to impose tariffs.”
The appeals court put its ruling on hold until October 14, allowing the Trump administration time to seek a reversal from the Supreme Court.
Minutes after the ruling, President Donald Trump sharply criticised the judgement, saying if allowed it would be a “ total disaster for the Country”.
In a post on his social media platform Truth Social, he attacked the appeals courts as "Highly Partisan" and asserted that the Supreme Court would rule in his favour.
“If these Tariffs ever went away, it would be a total disaster for the Country,” Trump wrote in his post. “If allowed to stand, this Decision would literally destroy the United States of America.”
“The President’s tariffs remain in effect, and we look forward to ultimate victory on this matter,” White House spokesman Kush Desai said in a separate statement, as quoted by CNBC.
Trump has relied heavily on tariffs in his second term, using them as a central tool of US foreign policy to pressure trading partners and push for revised trade agreements. While the duties have helped his administration secure economic concessions, they have also added to uncertainty in financial markets.
The lawsuits were filed separately by five small US businesses and a coalition of 12 Democratic-led states, who argued that under the Constitution, the power to issue taxes and tariffs lies with Congress and any delegation of that authority must be both explicit and limited.
Trump had defended the tariffs as a way to rebalance global trade and protect US industries. He said the April tariffs were necessary because the US had imported more than it exported for decades, undermining manufacturing and military readiness.
He also said the February tariffs against China, Canada and Mexico were justified because those countries were not doing enough to curb the flow of illegal fentanyl into the US - an assertion those governments have denied.
The New York-based US Court of international trade had earlier ruled against Trump’s tariff policies on May 28, saying the president had exceeded his powers when imposing both sets of challenged tariffs. That three-judge panel included one judge appointed by Trump during his first term. Another court in Washington also found that IEEPA does not authorize tariffs, with the government appealing that decision.
According to Reuters, at least eight lawsuits have been filed against Trump’s tariff measures, including one brought by the state of California.
While the latest decision restricts tariffs imposed under IEEPA, it leaves intact those imposed under other legal authorities. The Justice Department is expected to appeal, with the case likely headed to the US Supreme Court.
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