New York, August 31: A divided U.S. appeals court on Friday ruled that most of President Donald Trump’s tariffs are unlawful, striking at the heart of a signature economic policy but allowing the duties to remain in place until mid-October to give the administration time to appeal to the Supreme Court.
In a 7-4 decision, the U.S. Court of Appeals for the Federal Circuit in Washington found that Trump exceeded his authority when he imposed what he called “reciprocal” tariffs in April as part of his trade war and a separate round of levies in February targeting China, Canada and Mexico. The court said the International Emergency Economic Powers Act (IEEPA), invoked by Trump, does not grant the president the power to impose tariffs.
“The statute bestows significant authority on the President to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs,” the majority wrote.
Tariffs on steel and aluminum imports, issued under separate legal authority, were unaffected by the ruling.
Trump, who has made tariffs a central plank of U.S. foreign and economic policy in his second term, denounced the ruling as partisan. “If these tariffs ever went away, it would be a total disaster for the country,” he wrote on his Truth Social platform, predicting that the Supreme Court would overturn the decision.
The administration has argued that IEEPA permits tariffs under emergency powers to “regulate” or block imports, citing national security threats from persistent trade deficits and cross-border fentanyl trafficking. Trump declared a national emergency last year over the U.S. trade imbalance, saying it undermined manufacturing and military readiness.
The case originated from lawsuits filed by small U.S. businesses and Democratic-led states, which argued the Constitution gives Congress, not the president, the authority to impose tariffs and taxes. Lower courts, including the U.S. Court of International Trade, had previously ruled against Trump’s tariff measures.
Markets showed little immediate reaction to the decision, though analysts warned that the ruling could inject further uncertainty into trade policy. “The last thing corporate America needs is more uncertainty on trade,” said Art Hogan, chief market strategist at B. Riley Wealth.
William Reinsch, a former Commerce Department official now at the Center for Strategic and International Studies, said the administration had expected the setback and is likely preparing alternative legal justifications.
The decision raises the prospect of a high-stakes Supreme Court battle that could shape the scope of presidential powers over economic policy. Trump is also fighting a separate legal case over the independence of the Federal Reserve, setting up what analysts called an unprecedented collision between the White House and the judiciary.
