A US appeals court has ruled that most tariffs imposed by Donald Trump are unlawful. The decision represents a major defeat for his trade agenda and signals a potential Supreme Court showdown.
The ruling cancels Trump’s “reciprocal” tariffs on dozens of nations. It also invalidates levies targeting 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 granted him authority. They emphasized that only Congress holds the constitutional power to impose tariffs.
The ruling will take effect on 14 October unless the Supreme Court intervenes.
Trump attacks ruling
Trump criticized the decision on Truth Social. He warned that overturning the tariffs would “literally destroy the United States”.
He accused the appeals court of partisanship and said the tariffs were vital to national and financial strength. Trump predicted America would ultimately prevail.
Emergency powers argument rejected
Trump had defended the tariffs under the IEEPA. He declared a trade emergency, claiming deficits threatened US national security.
The court disagreed. In its 127-page ruling, it said 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 from 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 country. They also added “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 nullified
The appeals court also struck down tariffs on Canada, Mexico and China. Trump argued they were necessary to curb drug imports.
Tariffs on steel and aluminium remain in effect. They were enacted under separate presidential authority.
White House warns of economic fallout
Before the ruling, White House lawyers warned of severe financial consequences. They said removing the tariffs could trigger a collapse similar to 1929.
They argued the US might fail to repay trillions already pledged by foreign partners. Such a scenario, they warned, could weaken national security and damage the economy.
The ruling also casts doubt on trade agreements where countries accepted lower tariffs in exchange for concessions.
Supreme Court expected to intervene
The case now appears headed to the Supreme Court. The justices have recently limited presidential powers when actions lack 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 was lawful executive action or presidential overreach.
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 determine a ruling that may redefine presidential authority over trade for years to come.
