A divided US appeals court has ruled that the majority of Donald Trump’s tariffs are unlawful, delivering a significant blow to one of the central pillars of his economic and foreign policy agenda. The decision sets the stage for a high-stakes legal battle that is expected to be decided by the Supreme Court.
In a 7-4 ruling, the U.S. Court of Appeals for the Federal Circuit found that the former president exceeded his authority by using the International Emergency Economic Powers Act (IEEPA) to justify the tariffs on imports. The judges noted that while the law grants presidents broad powers during national emergencies, it does not explicitly authorize the imposition of tariffs or taxes.
The ruling applies to the “reciprocal tariffs” Trump introduced in April and additional levies placed in February against China, Canada, and Mexico. Tariffs issued under other statutes, such as those on steel and aluminum, remain unaffected.
Trump’s Reaction and Defense
Trump, who has made tariffs a key tool of his trade policy, dismissed the ruling as partisan. On his social media platform, Truth Social, he warned that removing the tariffs would be a “total disaster” for the United States but expressed confidence that the Supreme Court would overturn the decision. The former president had declared a national emergency to justify his actions, citing persistent trade deficits, a loss of U.S. manufacturing, and the flow of fentanyl across borders. His Justice Department argued that the emergency provisions gave him the power to regulate or block imports altogether.
Economic and Political Ramifications
The decision has introduced new uncertainty into markets that are already sensitive to trade disputes. Analysts suggest the administration was prepared for the setback and may try to use other statutes to keep the tariffs in place.
“The last thing corporate America needs is more trade uncertainty,” said Art Hogan, chief market strategist at B. Riley Wealth.
The case adds to a broader legal showdown over Trump’s economic policies, including his ongoing battle with the Federal Reserve. Experts suggest the Supreme Court, with its conservative majority, will ultimately decide the fate of Trump’s trade agenda.
The court has allowed the tariffs to remain in effect until October 14, giving Trump’s team time to appeal. With multiple lawsuits still pending, the legal fight could redefine presidential powers on trade and reshape U.S. economic policy for years to come.
