A federal appeals court has ruled most of Donald Trump’s global tariffs illegal, shaking up the future of presidential powers over trade.
The Thursday decision from the US Court of Appeals for the Federal Circuit has major immediate and long-term consequences for US trade, international diplomacy, and domestic law.
The implementation of the ruling is delayed until October 14, giving the Trump administration time to appeal to the Supreme Court.
Why were the tariffs declared illegal?
The recent ruling centers on Trump’s use of the International Emergency Economic Powers Act (IEEPA), a 1977 law designed to let presidents respond to “unusual and extraordinary threats” to the US economy and security.
The court found Trump had stretched the meaning of the law by declaring a “national emergency” based on persistent trade deficits and using that as grounds for imposing tariffs on nearly all foreign trade partners.
The court’s 7-4 decision stated, “None of these actions explicitly encompasses the authority to impose tariffs, duties, or similar measures, nor the authority to levy taxes.”
Trump’s “reciprocal” tariffs, including those against China, Canada, Mexico, and countries like India, were ruled invalid, but tariffs set under other authorities (such as on steel and aluminum) are unaffected for now.
Two consolidated lawsuits, one from businesses, one from states, had challenged the president’s power, arguing that only Congress can levy taxes and tariffs as outlined in the Constitution.
The case has also been sent back to a lower court to decide how broadly the decision applies, raising uncertainty for thousands of US companies and the global trade landscape.
Trump has denounced the ruling as “a total disaster for the Country” and vowed to fight it in the Supreme Court.
On his Truth Social platform, he said, “If allowed to stand, this decision would literally destroy the United States of America,” expressing confidence the high court would side with him.
What’s next for US trade policy
For now, Trump’s tariffs remain in effect until mid-October while the legal process plays out, maintaining the trade status quo for American businesses.
The administration is expected to appeal to the Supreme Court, potentially setting up a landmark battle over the scope of presidential powers in trade conflicts.
Should the Supreme Court uphold the appeals court’s decision, it would restrict future presidents from unilaterally imposing tariffs by invoking emergency laws, reaffirming Congress’s sole authority over taxation and customs duties.
This would upend decades of executive flexibility on economic sanctions and trade negotiations, possibly leaving American officials with fewer options for pressuring rivals like China or renegotiating unfair trade practices.
The uncertainty is immediate: global markets are watching for signals of policy change, US allies are reevaluating ongoing trade talks, and industries hit by recent tariffs are contemplating whether restitution or relief could be possible.
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