A recent ruling by the US Court of Appeals for the Federal Circuit has declared most of former President Donald Trump’s tariffs illegal, setting the stage for a potential legal battle that could reshape America’s trade policy. The decision challenges the scope of presidential power in imposing tariffs and underscores the ongoing tension between the executive branch and Congress over trade authority.
The Court’s Decision: Tariffs Declared “Invalid as Contrary to Law”
In a 7-4 ruling, the appeals court rejected Trump’s justification that his tariffs were authorized under the International Emergency Economic Powers Act (IEEPA). The court found that the IEEPA does not explicitly grant the president the power to impose tariffs, which remain a “core Congressional power.”
The 127-page judgment emphasized that when Congress intends to delegate tariff authority to the president, it does so explicitly, using clear language such as “tariff” or “duty.” The court concluded that the broad tariffs imposed by Trump, including “reciprocal” tariffs on most countries and specific levies on China, Mexico, and Canada, exceeded the president’s legal authority.
Background: Trump’s Tariff Strategy and Legal Challenges
Trump imposed a baseline 10% tariff on imports from nearly every country in April 2024, framing it as a “liberation day” from unfair trade practices. He argued that trade imbalances posed national security threats, justifying the tariffs under the IEEPA’s emergency powers.
However, small businesses and a coalition of US states challenged the tariffs in court, leading to the initial ruling by the Court of International Trade that deemed the tariffs unlawful. The appeals court’s recent decision upholds that view, though it does not affect tariffs imposed under other presidential authorities, such as those on steel and aluminum.
Political and Economic Implications
Trump criticized the ruling on his social media platform, calling it “a total disaster for the Country” that would make the US financially weak. The White House warned that invalidating the tariffs could trigger a financial crisis akin to the 1929 stock market crash, emphasizing the tariffs’ role in national security and economic stability.
The ruling also casts uncertainty over existing agreements with other nations that involved reduced tariff rates, potentially complicating international trade relations.
What’s Next? The Supreme Court Awaits
The administration has until 14 October to request the Supreme Court’s review. Given the court’s recent skepticism toward expansive presidential actions without clear congressional authorization—seen in cases involving environmental regulations and student loan forgiveness—the justices will face a critical decision on the limits of executive power.
The Supreme Court’s composition, with six Republican-appointed justices including three appointed by Trump, adds an intriguing dimension to the case’s prospects.
Why This Matters
This ruling highlights the constitutional balance of power in trade policy and could redefine how future presidents approach tariffs and economic sanctions. It also underscores the importance of congressional involvement in major economic decisions, reinforcing the principle that sweeping trade measures require legislative backing.
As the case progresses, businesses, policymakers, and international partners will be watching closely to see how America’s trade landscape evolves.