WASHINGTON, D.C. — In a significant legal and political setback for the Trump administration, a federal appeals court has ruled that most of the president’s sweeping tariffs are illegal, stating that he overstepped his authority under a decades-old emergency powers law. The 7-4 decision by the U.S. Court of Appeals for the Federal Circuit affirmed a lower court’s finding but allowed the tariffs to remain in effect for now, giving the administration a window to appeal to the Supreme Court.
A Challenge to Presidential Power
The ruling centers on the administration’s use of the International Emergency Economic Powers Act (IEEPA), a 1977 law that allows presidents to take certain economic measures during a declared national emergency. The administration had invoked IEEPA to impose tariffs on a wide range of trading partners, including many allies, arguing that persistent U.S. trade deficits constituted a national emergency. However, the appeals court found that while the statute grants the president significant authority, it does not explicitly mention the power to impose tariffs.
The court’s majority opinion highlighted the constitutional principle that the power to levy taxes and duties rests with Congress. “The text and structure of IEEPA make it unlikely that Congress intended to grant the president unlimited authority to impose tariffs,” the court wrote. This decision largely upholds a May ruling by the U.S. Court of International Trade in New York, which combined lawsuits filed by several businesses and states that argued the tariffs were unconstitutional.
The ruling does not affect all tariffs imposed by the administration. It specifically targets the “reciprocal” duties that were placed on almost every country in the world, as well as separate tariffs on China, Mexico, and Canada. Tariffs on steel and aluminum, which were imposed under a different law, Section 232 of the Trade Expansion Act of 1962, are not affected by this decision.
“The President cannot lawfully impose tariffs on his own, and IEEPA does not give him unlimited unilateral tariff authority,” said Jeffrey Schwab of the Liberty Justice Center, a law firm that represented private business plaintiffs in the lawsuit. “This decision protects American businesses and consumers from the uncertainty and harm caused by these unlawful tariffs.”
President Trump, in a post on his social media platform, criticized the ruling as a “total disaster for the Country,” vowing to fight the decision at the Supreme Court.
The Financial and Strategic Stakes
The financial implications of this ruling are immense. The administration has collected billions of dollars in revenue from the tariffs in question. The Justice Department has warned in court filings that if the tariffs were ultimately struck down, the U.S. government could face “financial ruin” from a flood of requests for refunds. According to news reports, revenue from tariffs now totals over $150 billion.
The decision also impacts the administration’s foreign policy. The president has used tariffs as a central tool to pressure allies and rivals into new trade agreements. The court’s ruling, which calls into question the legal basis for this strategy, could embolden foreign governments to resist future demands and may even lead to the unraveling of existing deals. The Office of the U.S. Trade Representative, a federal agency responsible for developing and coordinating U.S. international trade policy, has not issued a public statement on the ruling.
The case now sets up a high-stakes legal battle that is expected to reach the Supreme Court, a move the administration has already vowed to make. The outcome will not only determine the fate of billions of dollars in tariffs but also set a precedent for the limits of presidential power in the realm of international trade and national security. The decision serves as a powerful reminder that even the most sweeping executive actions can be subject to judicial review, and the constitutional balance of power remains a check on the presidency.