Federal Appeals Court Strikes Down Majority of Trump’s Tariffs: Unlawful Use of Emergency Powers Ruled

In a significant ruling, a federal appeals court has determined that several of President Trump’s tariffs were imposed unlawfully using emergency powers. The decision upholds a lower-court verdict against the tariffs, stating they exceeded the president’s authority as the Constitution grants the power to impose taxes, including tariffs, to Congress.

The International Emergency Economic Powers Act (IEEPA) does not authorize tariffs similar to those used by Trump earlier this year, according to the court’s unsigned opinion. The judges emphasized that these tariffs constitute an overreach of executive power due to the legislative branch’s exclusive authority over taxation.

Despite the court’s decision, the tariffs remain in effect temporarily, with implementation of the ruling delayed until October. This delay allows the administration time to file an appeal with the Supreme Court.

President Trump took to social media late Friday, asserting that all tariffs are still active. He suggested that removing them would lead to disastrous consequences for the country.

Trump’s tariffs have significantly influenced global trade, as well as alliances and relationships with both friendly nations and adversaries. As a crucial component of his economic strategy, these tariffs have enabled Trump to pursue ambitious goals. If the administration loses its ability to claim certain powers used to set these tariffs, it may need to explore alternative strategies to achieve similar objectives.

Treasury Secretary Steven Mnuchin had previously stated that tariff negotiations with America’s trading partners would likely be concluded by Labor Day. However, given foreign leaders’ potential need for clarity on the legal application of Trump’s tariffs, this deadline appears uncertain.

In a statement, the White House defended the president’s authority to impose import taxes using the economic emergency law. The White House spokesperson asserted that President Trump legally exercised the tariff powers granted by Congress to protect national and economic security from foreign threats.

The court found that the IEEPA does not grant the president “wide-ranging authority” to impose tariffs of the scale under question in this case, unless there is explicit congressional authorization. The absence of any such tariff language in the IEEPA contrasts with statutes where Congress has expressly granted such power and included clear limits on that power.

The majority concluded that Trump’s attempt to implement sweeping tariffs like those at issue in the case necessitates explicit congressional authorization for legal implementation. Dissenting judges argued that the emergency powers invoked by Trump provide some authority to impose tariffs, but their opinion was not supported by the majority.

The full bench of the Federal Circuit heard the case, with seven judges ruling against Trump and four dissenting from the decision. The majority ruled that Trump exceeded his authority when he used the emergency law to impose the tariffs, but chose not to block them outright. Instead, they sent challenges to the levies back to the lower court for reconsideration regarding whether they overstepped boundaries on a nationwide basis.

In May, a federal court determined that Trump did not possess the authority under the IEEPA to impose sweeping tariffs. The administration immediately appealed the decision, setting the stage for a legal battle over the economic policy that promises to reorient the American economy toward manufacturing but could potentially increase prices for small businesses and consumers.

A three-judge panel at the US Court of International Trade previously blocked all tariffs invoked under IEEPA, as well as the “Liberation Day” tariffs announced on April 2 and tariffs imposed earlier this year against China, Mexico, and Canada to combat fentanyl entering the United States. Notably, the order did not include the 25% tariffs on autos, auto parts, steel, or aluminum, which were under a different law, Section 232 of the Trade Expansion Act.

The panel rendered unanimous summary judgments in two separate cases consolidated by the appeals court. One case involved a lawsuit filed in April by the Liberty Justice Center, representing wine seller VOS Selections and four other small businesses. The other case was filed by 12 Democratic states against the government over tariffs.