Major Blow to Trump’s Trade Agenda as Appeals Court Rules Tariffs Unlawful
WASHINGTON — In a significant setback to President Donald Trump’s trade agenda, a federal appeals court has ruled that he overstepped his authority by imposing extensive tariffs on nearly all U.S. trading partners under emergency powers.
The U.S. Court of Appeals for the Federal Circuit upheld most of a previous decision by the Court of International Trade in New York, which deemed Trump’s “Liberation Day” tariffs illegal.
With a 7-4 ruling, the appeals court determined that Congress did not intend to give the president “unlimited authority to impose tariffs” under the 1977 International Emergency Economic Powers Act.
While the judges did not immediately strike down the tariffs, they allowed them to remain in effect while Trump appeals to the U.S. Supreme Court.
Trump had asserted exceptional powers to bypass Congress and enforce reciprocal tariffs of up to 50 percent on countries with whom the U.S. has trade deficits, in addition to a 10 percent baseline tariff on most imports.
He justified these measures by declaring trade deficits and immigration flows as a “national emergency.”
The tariffs caused uncertainty in global markets and disrupted businesses, leading to a surge in tariff revenue to $159 billion by July 2025, double the previous year’s amount.
The Justice Department cautioned that striking down the tariffs could result in the government having to refund billions, posing a risk of “financial ruin” for the U.S. Treasury.
Trump’s administration cited past cases, such as Richard Nixon’s use of tariffs in the 1970s, as precedent for his actions. However, the appeals court rejected this comparison, stating that the law does not grant presidents unlimited tariff powers.
The ruling does not impact Trump’s other tariffs imposed under different legal authorities, such as those on steel, aluminum, autos under Section 232 of the 1962 Trade Expansion Act, or the tariffs on China initially imposed during Trump’s term and continued by Joe Biden.
Nevertheless, the decision puts Trump’s broad tariff strategy at risk. Without emergency powers, his ability to swiftly and unilaterally impose tariffs would be severely restricted.
The Trade Act of 1974 allows for tariffs of up to 15 percent for 150 days against countries with large trade deficits, while Section 232 requires a Commerce Department investigation before new tariffs can be imposed.
Trump vowed to challenge the ruling in the Supreme Court, cautioning on social media that “if allowed to stand, this Decision would literally destroy the United States of America.” — Agencies
