A U.S. federal appeals court has ruled that most of former President Donald Trump’s tariffs are illegal, dealing a significant blow to one of his signature economic strategies. In a 7-4 decision, the Court of Appeals for the Federal Circuit said Trump overstepped his authority by using the International Emergency Economic Powers Act (IEEPA) to impose tariffs, a law historically intended for sanctions and asset freezes during national emergencies. The court delayed enforcement of the ruling until October 14, giving the Trump administration time to appeal to the Supreme Court.
Trump, who has made tariffs a central pillar of his second-term trade policy, denounced the decision as partisan and warned that removing the levies would be “a total disaster for the country.” He insisted, however, that the Supreme Court would ultimately uphold his measures. The tariffs, introduced against countries including China, Canada, and Mexico, were justified by Trump as a response to trade deficits and the cross-border flow of drugs, claims those governments have denied.
The court’s majority opinion emphasized that IEEPA does not explicitly authorize tariffs or taxes, noting that such powers remain under Congress. The lawsuits challenging Trump’s actions were filed by small businesses and Democratic-led states, who argued that the Constitution restricts tariff authority to lawmakers. Previous lower courts had also found Trump exceeded his authority, setting up a string of legal defeats that now converge at the nation’s highest court.
The ruling adds further uncertainty to Trump’s broader economic agenda, which is already under strain from a separate legal battle over his attempt to fire Federal Reserve Governor Lisa Cook. Analysts warn that both disputes could reach the Supreme Court simultaneously, creating an unprecedented test of presidential power and the independence of U.S. institutions.
Financial markets showed little immediate reaction, though experts caution that prolonged legal wrangling could unsettle trade relations and business confidence. With the Supreme Court holding a conservative majority but wary of expanding presidential authority through older statutes, the outcome of the tariff battle remains a pivotal question for U.S. economic policy.
