In a significant legal development, the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. has ruled that the majority of tariffs imposed by former President Donald Trump are illegal. The decision, announced on Friday, represents a substantial challenge to one of Trump's central economic strategies during his tenure.
The court found that Trump exceeded his authority when he levied key tariffs under the International Emergency Economic Powers Act (IEEPA). Although this ruling undermines a significant element of Trump's economic policy, the imposed tariffs will remain effective until October 14, providing the Trump administration with an opportunity to appeal to the U.S. Supreme Court.
Throughout his presidency and into his second term, Trump has relied on tariffs as a tool to renegotiate trade agreements and exert pressure on foreign governments. These tariffs have been controversial, sparking debate over their effectiveness and impact on global trade relations.
According to Reuters, the court stated that while the IEEPA provides the President with substantial power to act in response to a declared national emergency, it does not expressly grant the authority to impose tariffs or taxes. The ruling emphasized that the statute does not specifically mention tariffs nor does it offer procedural safeguards with clear limitations on the President's ability to enact such measures.
The decision does not encompass all tariffs issued by Trump. It specifically addresses the so-called "reciprocal" tariffs introduced in April, as well as a separate set of tariffs imposed in February against China, Canada, and Mexico. Notably, Trump's steel and aluminum tariffs, which were issued under a different authority, remain intact.
Trump has justified these tariffs by citing trade imbalances and the issue of fentanyl trafficking across U.S. borders. In April, he declared a national emergency, arguing that longstanding trade deficits posed a threat to U.S. manufacturing and national security. He also claimed that the tariffs on China, Canada, and Mexico were warranted because these nations were not adequately preventing fentanyl from entering the United States—a claim these countries have denied.
The Justice Department has supported the President's stance, arguing that the IEEPA grants him the power to regulate or completely block imports. However, the appellate court disagreed, indicating that Congress did not intend to provide the President with unrestricted tariff powers when enacting the IEEPA.
The 1977 law had traditionally been used to freeze assets or impose sanctions on hostile entities, but Trump's use of it to justify tariffs was unprecedented. The legal challenge to the tariffs was initiated by two separate lawsuits—one from five U.S. businesses and another from 12 Democrat-led states. Both lawsuits contended that the Constitution assigns authority over tariffs and taxes to Congress, not the President, and that any delegation of this power must be explicitly limited.
Previously, the U.S. Court of International Trade in New York ruled against Trump's tariffs, with a three-judge panel, which included a Trump appointee, stating that the President had overstepped his authority. Another court in Washington issued a similar ruling. To date, at least eight lawsuits are challenging the President's tariff policies, with one notable case filed by the state of California.
This legal setback for the Trump administration has sparked reactions across the political spectrum. Critics argue that the judiciary is overreaching in its influence on foreign policy, while supporters of the ruling believe it upholds constitutional checks and balances. The upcoming appeal to the Supreme Court is poised to further shape the discourse on presidential powers and economic governance.
