A US appeals court has ruled that most tariffs imposed by Donald Trump are unlawful. The decision deals a major blow to his trade agenda and sets up a likely Supreme Court showdown.
The ruling cancels Trump’s “reciprocal” tariffs on dozens of nations. It also invalidates levies applied to China, Mexico and Canada.
Court reinforces Congress’s tariff authority
In a 7-4 decision, the US Court of Appeals for the Federal Circuit declared the tariffs “invalid as contrary to law”.
Judges rejected Trump’s argument that the International Emergency Economic Powers Act gave him authority. They emphasized that Congress holds the exclusive power to impose tariffs.
The ruling will take effect on 14 October unless the Supreme Court intervenes.
Trump attacks court decision
Trump criticized the ruling on Truth Social. He warned that striking down the tariffs would “literally destroy the United States”.
He accused the appeals court of bias and said the tariffs were vital to national and financial strength. Trump predicted the country would ultimately prevail.
Emergency powers claim dismissed
Trump had defended the tariffs under the IEEPA. He declared a trade emergency, claiming deficits threatened US security.
The court disagreed. In its 127-page ruling, 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 by states and businesses
Two lawsuits prompted the case. Small businesses and a coalition of states challenged Trump’s April executive orders.
The orders imposed a 10% tariff on nearly every nation. They also added “reciprocal” tariffs on dozens of others. 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 Canada, Mexico and China nullified
The appeals court also struck down tariffs on Canada, Mexico and China. Trump had claimed they were needed to curb drug imports.
Tariffs on steel and aluminium remain in place. They were imposed under a separate presidential authority.
White House warns of financial fallout
Before the ruling, White House lawyers predicted severe consequences. They said revoking the tariffs could trigger a financial collapse like 1929.
They argued the US might fail to repay trillions already committed by foreign partners. Such a scenario, they warned, could weaken security and damage the economy.
The ruling also casts doubt on trade deals where countries accepted lower tariffs in exchange for concessions.
Supreme Court expected to weigh in
The case now appears headed to the Supreme Court. The justices have recently limited presidential actions taken without explicit congressional approval.
During Joe Biden’s presidency, the court blocked climate regulations and struck down student debt relief under the “major questions doctrine”.
The Supreme Court must now decide whether Trump’s tariff program constitutes lawful executive action or presidential overreach.
Conservative justices may determine outcome
Trump lost in the appeals court, where only three of eleven judges were Republican appointees.
The Supreme Court has six conservative justices, including three appointed by Trump himself.
That majority could shape a ruling that may redefine presidential authority over trade for years to come.
