A US appeals court has ruled that most tariffs introduced by Donald Trump are unlawful. The decision could trigger a legal battle that threatens his trade policy agenda.
The ruling affects Trump’s “reciprocal” tariffs placed on many countries worldwide. It also covers levies on China, Mexico and Canada.
Court strikes down Trump’s argument
In a 7-4 decision, the US Court of Appeals for the Federal Circuit rejected Trump’s legal reasoning. Judges said the tariffs were “invalid as contrary to law”.
The court dismissed his claim that the measures were legal under the International Emergency Economic Powers Act. Judges declared that tariff-setting remains a core power of Congress.
The ruling takes effect on 14 October. This delay gives the administration time to ask the Supreme Court to hear the case.
Trump attacks decision as partisan
Trump condemned the ruling on his social media platform Truth Social. He warned that removing the tariffs would “literally destroy the United States”.
He called the court “highly partisan” and predicted that America would ultimately prevail. Trump claimed lifting the tariffs would leave the country financially weak and vulnerable.
Judges say tariffs not covered by emergency law
Trump had justified his measures under the IEEPA, which grants presidential powers during economic threats. He declared a national emergency on trade, arguing that imbalances endangered national security.
But the court rejected this interpretation. In its 127-page ruling, it noted that the IEEPA “neither mentions tariffs nor contains limits on the President’s power to impose them”.
The judgement stressed that Congress has always reserved authority over tariffs. Whenever lawmakers intend to delegate tariff powers, they do so explicitly, the judges wrote.
Ruling responds to lawsuits from states and businesses
Two lawsuits triggered the case. Small businesses and a coalition of US states filed complaints after Trump’s April executive orders.
His directives introduced a 10% baseline tariff on nearly every country. They also imposed “reciprocal” tariffs on dozens of nations. Trump called the date America’s “liberation day” from unfair trade policies.
In May, the Court of International Trade in New York had already declared the tariffs unlawful. That decision was paused during the appeals process.
Tariffs on neighbours and China struck down
Friday’s ruling also invalidates Trump’s tariffs on Canada, Mexico and China. Trump argued these measures were vital to combat drug imports.
However, the decision does not apply to tariffs on steel and aluminium. Those were enacted under a different presidential authority.
White House warns of economic disaster
Ahead of the judgement, White House lawyers issued stark warnings. They argued that revoking the tariffs could unleash a financial collapse similar to 1929.
They said the country might fail to repay trillions already committed by foreign partners. In their view, the result would be financial ruin and national weakness.
The ruling also casts doubt on trade deals where countries accepted reduced tariff rates with the US.
Case likely heading to Supreme Court
The dispute now appears destined for the Supreme Court. The justices have recently restricted presidents from pursuing sweeping policies without clear approval from Congress.
During Joe Biden’s presidency, the court blocked climate rules for power plants and cancelled student debt relief. Both were struck down under the “major questions doctrine”.
If the top court accepts the case, it must decide whether Trump’s tariff programme represents presidential overreach or lawful executive action.
Political balance may shape outcome
Although the appeals court rejected Trump’s arguments, political context remains key. Only three of its eleven judges were appointed by Republicans.
The Supreme Court, however, has a conservative majority. Six of its justices are Republican appointees, including three chosen by Trump himself.
This balance may heavily influence the outcome of a case that could redefine presidential powers over trade.
