A US appeals court has ruled that most tariffs imposed by Donald Trump are illegal. The decision delivers a significant blow to his trade agenda and sets the stage for a Supreme Court review.
The ruling cancels Trump’s “reciprocal” tariffs on dozens of countries. It also nullifies levies on China, Mexico and Canada.
Court reinforces Congress’s tariff authority
In a 7-4 decision, the US Court of Appeals for the Federal Circuit declared the tariffs “invalid as contrary to law”.
Judges rejected Trump’s claim that the International Emergency Economic Powers Act allowed him to act. They emphasized that only Congress has the constitutional authority to impose tariffs.
The ruling will take effect on 14 October unless the Supreme Court intervenes.
Trump attacks the ruling
Trump condemned the decision on Truth Social. He warned that overturning the tariffs would “literally destroy the United States”.
He accused the appeals court of partisanship and said the tariffs were vital to national and financial strength. Trump predicted the country would ultimately prevail.
Emergency powers defense dismissed
Trump had justified his tariffs under the IEEPA. He declared a trade emergency, claiming deficits threatened US national security.
The court disagreed. In its 127-page opinion, it stated that the IEEPA “neither mentions tariffs nor limits presidential authority to impose them”.
Judges emphasized that Congress has historically reserved tariff powers and only delegates them explicitly.
Lawsuits from states and businesses
Two lawsuits triggered the case. Small businesses and a coalition of states challenged Trump’s April executive orders.
The orders imposed a 10% tariff on nearly every nation. They also introduced “reciprocal” tariffs on dozens of others. Trump described the move as America’s “liberation day” from unfair trade.
The Court of International Trade had previously ruled the tariffs unlawful, though that decision was paused during the appeal.
Tariffs on Canada, Mexico and China struck down
The appeals court also invalidated tariffs on Canada, Mexico and China. Trump had claimed they were necessary to curb drug imports.
Tariffs on steel and aluminium remain in effect. They were enacted under separate presidential authority.
White House warns of economic fallout
Before the ruling, White House lawyers predicted serious consequences. They said removing the tariffs could trigger a financial collapse similar to 1929.
They warned the US might fail to repay trillions already pledged by foreign partners. Such a scenario could weaken national security and damage the economy.
The decision also casts doubt on trade deals where countries accepted lower tariffs in exchange for concessions.
Supreme Court expected to weigh in
The case now appears headed to the Supreme Court. The justices have recently limited presidential actions taken without explicit congressional approval.
During Joe Biden’s presidency, the court blocked climate regulations and struck down student debt relief under the “major questions doctrine”.
The Supreme Court must now decide whether Trump’s tariff program was lawful executive action or presidential overreach.
Conservative justices could decide outcome
Trump lost in the appeals court, where only three of eleven judges were Republican appointees.
The Supreme Court has six conservative justices, including three appointed by Trump himself.
That majority could determine the outcome of a case that may redefine presidential authority over trade for years.
