In a landmark decision, a divided U.S. appeals court ruled on Friday that the majority of former President Donald Trump’s tariffs, a cornerstone of his international economic policy, are illegal. The ruling specifically targets tariffs imposed under the International Emergency Economic Powers Act (IEEPA), which Trump used to justify levies on trading partners like China, Canada, and Mexico. The court found that the 1977 law, historically used for sanctions against enemies, does not explicitly grant the president the unlimited authority to impose tariffs, a power it stated resides with Congress.
The court’s 7-4 decision allows the tariffs to remain in effect until October 14th, providing the Trump administration a window to file an appeal with the U.S. Supreme Court. Trump immediately criticized the ruling from a “highly partisan” court but predicted a reversal, stating that overturning the tariffs would be a “total disaster” for the country. This legal challenge, coupled with a separate fight over the Federal Reserve’s independence, is now poised to trigger an unprecedented Supreme Court battle over the foundation of Trump’s economic agenda.
The legal controversy centers on the interpretation of IEEPA, which grants the president powers to address national emergencies. The Justice Department argued the law allows a president to “regulate” or block imports, thereby authorizing tariffs. However, the court rejected this, writing, “It seems unlikely that Congress intended… to grant the President unlimited authority to impose tariffs.” Trump was the first president to use this law for broad tariff policy, justifying it based on trade imbalances and threats to U.S. manufacturing.
This ruling does not affect tariffs issued under other legal authorities, such as those on steel and aluminum imports. The outcome of the impending Supreme Court appeal will have profound consequences, determining the extent of executive power in setting trade policy and defining the tools available to future presidents to manage international economic relations and perceived emergencies.
