A US appeals court has ruled that most tariffs imposed by Donald Trump are unlawful. The decision delivers a serious setback to his trade policies and points toward a Supreme Court confrontation.
The ruling cancels Trump’s “reciprocal” tariffs on dozens of nations. It also invalidates levies imposed on China, Mexico and Canada.
Court confirms Congress controls tariffs
In a 7-4 decision, the US Court of Appeals for the Federal Circuit ruled the tariffs “invalid as contrary to law”.
Judges rejected Trump’s claim that the International Emergency Economic Powers Act gave him authority. They emphasized that only Congress can impose tariffs.
The ruling will take effect on 14 October unless the Supreme Court intervenes.
Trump criticizes decision
Trump condemned the ruling on Truth Social. He warned that striking down the tariffs would “literally destroy the United States”.
He accused the appeals court of partisanship and said the tariffs were essential to national and financial strength. Trump predicted the country would ultimately prevail.
Emergency powers argument rejected
Trump had justified the tariffs under the IEEPA. He declared a trade emergency, arguing that deficits threatened US national security.
The court dismissed this reasoning. In its 127-page opinion, it wrote that the IEEPA “neither mentions tariffs nor limits presidential authority to impose them”.
Judges stressed that Congress has historically reserved tariff powers and only delegates them explicitly.
Legal challenges from states and businesses
Two lawsuits led to the case. Small businesses and a coalition of states challenged Trump’s April executive orders.
The orders imposed a 10% tariff on nearly every country. They also introduced “reciprocal” tariffs on dozens of nations. Trump described the move as America’s “liberation day” from unfair trade.
The Court of International Trade had already ruled the tariffs unlawful, though that decision was paused during appeal.
Tariffs on allies and China struck down
The appeals court also invalidated tariffs on Canada, Mexico and China. Trump argued they were necessary to combat 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 warned of severe consequences. They said removing the tariffs could trigger a financial collapse similar to 1929.
They argued the US might fail to repay trillions already pledged by foreign partners. Such a scenario, they said, could weaken national security and devastate the economy.
The decision also raises questions about trade deals where countries accepted reduced tariffs in exchange for concessions.
Supreme Court battle expected
The case now appears headed for the Supreme Court. The justices have recently restricted presidential actions taken without clear congressional approval.
During Joe Biden’s presidency, the court blocked climate regulations and student debt relief under the “major questions doctrine”.
The Supreme Court must now decide whether Trump’s tariff program was lawful executive action or an overreach of presidential authority.
Conservative majority may tip outcome
Trump lost in the appeals court, where only three of eleven judges were Republican appointees.
The Supreme Court, however, 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 to come.
