A US appeals court has ruled that most tariffs imposed by Donald Trump are illegal. The decision marks a major defeat for his trade policies and sets the stage for a Supreme Court review.
The ruling cancels Trump’s “reciprocal” tariffs applied to dozens of countries. It also invalidates levies on China, Mexico and Canada.
Court reaffirms congressional authority
In a 7-4 decision, the US Court of Appeals for the Federal Circuit called the tariffs “invalid as contrary to law”.
Judges rejected Trump’s claim that the International Emergency Economic Powers Act granted him authority. They emphasized that only Congress has the power to set tariffs.
The ruling will take effect on 14 October unless the Supreme Court intervenes.
Trump attacks ruling
Trump criticized the court on Truth Social. He warned that removing the tariffs would “literally destroy the United States”.
He accused the appeals court of partisanship and said the tariffs were essential to national and financial strength. Trump predicted the country would ultimately prevail.
Emergency powers argument dismissed
Trump had defended his tariffs under the IEEPA. He declared a trade emergency, claiming deficits threatened US national security.
The court rejected this reasoning. In its 127-page opinion, it said the IEEPA “neither mentions tariffs nor limits presidential authority to impose them”.
Judges emphasized that Congress has historically reserved tariff powers and delegates them only through explicit legislation.
Legal challenges by states and businesses
Two lawsuits led to 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 established “reciprocal” tariffs on dozens more. Trump described the move as America’s “liberation day” from unfair trade.
The Court of International Trade had previously ruled the tariffs unlawful, though that decision was paused during the appeal.
Tariffs on Canada, Mexico and China struck down
The appeals court also invalidated tariffs on Canada, Mexico and China. Trump argued they were necessary to prevent drug imports.
Tariffs on steel and aluminium remain unaffected. They were enacted under a separate presidential authority.
White House warns of economic consequences
Before the ruling, White House lawyers issued stark warnings. They said removing the tariffs could trigger a financial collapse similar to 1929.
They claimed the US might fail to repay trillions already promised by foreign partners. Such a scenario could weaken national security and harm the economy.
The decision also casts doubt on trade agreements where countries accepted lower tariffs in exchange for concessions.
Supreme Court likely to intervene
The case now appears headed to the Supreme Court. The justices have recently limited presidential actions taken without clear 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 will now decide whether Trump’s tariff program was lawful executive action or an overreach of presidential authority.
Conservative justices could decide 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.
