A federal appeals court has ruled that most of Donald Trump’s tariffs were an overreach of his presidential emergency powers. These so-called reciprocal tariffs, which had been imposed on nearly every trading partner of the United States, were declared unlawful under the court’s interpretation of the International Emergency Economic Powers Act (IEEPA).
The ruling upholds a decision made earlier by the Court of International Trade, which rejected Trump’s claim that his global tariffs were permissible under emergency economic powers. The tariffs in question, announced in April as a flat 10% rate on imports from all countries, were justified by Trump as a way to level “unfair” trade relations.
Although the court did not immediately strike down the tariffs, it ruled that they will remain in effect only until mid-October, giving the administration time to pursue an appeal before the Supreme Court.
What Did the Appeals Court Say?
In a 7–4 decision, the appellate court concluded that Trump had no legal authority to impose such sweeping global tariffs. The judges noted that the IEEPA, a law from 1977 granting the president powers to act in response to extraordinary foreign threats, did not grant “the power to impose tariffs, duties, or the like, or the power to tax.”
The court further underscored that the “power of the purse” belongs to Congress, not the executive branch. Trump, reacting on Truth Social, blasted the decision as “highly partisan” and warned that it would “literally destroy the United States of America” if allowed to stand.
What Exactly Is the IEEPA?
The International Emergency Economic Powers Act was designed to let presidents respond to international emergencies through economic measures such as sanctions and restrictions. It has been invoked multiple times in modern history — for example, to impose sanctions on Russia after the annexation of Crimea in 2014 and again after the 2022 invasion of Ukraine.
However, the appeals court ruled that tariffs are not part of the emergency toolbox. The law neither mentions tariffs nor provides procedural safeguards for imposing them, leaving taxation firmly in Congress’s domain.
Why Is This Important?
The ruling represents a major setback to Trump’s trade agenda and could have ripple effects across both the U.S. and global economies. Since tariffs function as taxes on imported goods, businesses now face uncertainty in planning supply chains and pricing strategies.
Economists have warned that the prolonged uncertainty could depress investment and dampen economic activity. Other nations, waiting to see whether the Supreme Court intervenes, may hold off on trade negotiations with Washington.
Politically, the outcome carries high stakes. A Supreme Court reversal would embolden future presidents to wield emergency powers far more aggressively, while an affirmation would sharply curtail Trump’s claims of executive authority.
What Happens Next?
The case is now almost certain to move to the Supreme Court. Trump has already signaled confidence that the conservative-majority bench will side with him, pointing to his own three appointments to the court. Still, the justices have in recent years pushed back on presidential overreach, striking down efforts by both Republican and Democratic administrations when they attempted to stretch existing laws beyond their intended scope.
If the Supreme Court affirms the appeals court decision, the U.S. government may face questions over whether billions collected in import taxes should be refunded. It could also destabilize ongoing trade talks with major partners like the UK, Japan, and South Korea, who negotiated deals with Washington under the assumption that the tariffs would remain in place.
Conversely, if the ruling is overturned, it would restore Trump’s tariffs and solidify his image as a hardline trade negotiator.
Are There Still Tariffs in Place?
For now, Trump’s reciprocal tariffs — affecting goods from nearly every major trading partner, including China, Mexico, and Canada — remain in effect until October 14. After that date, they will no longer be enforceable unless the Supreme Court intervenes.
Other tariffs, such as those on steel, aluminium, and copper, remain unaffected because they were enacted under a different presidential authority.
