NEW YORK, Aug 29 – A divided U.S. appeals court has struck down most of the tariffs imposed under the President Trump, ruling by a 7-4 vote that the measures exceed the legal authority granted to the executive branch. The decision represents a major blow to one of Trump’s most prominent economic and foreign policy tools, though the court delayed its ruling from taking effect until October 14 to allow time for an appeal to the Supreme Court.
The case has now set the stage for a potentially historic confrontation at the nation’s highest court, one that could reshape the scope of presidential power over trade and emergency economic measures. The ruling also comes at a time when Trump faces mounting legal fights over other aspects of his economic policies, including disputes tied to the independence of the Federal Reserve.
Court Challenges the Scope of Tariff Authority
Trump made tariffs central to his economic agenda, portraying them as a means of forcing trading partners to renegotiate deals, reduce imbalances, and strengthen American manufacturing. His administration argued that reciprocal tariffs and targeted duties gave Washington leverage to extract concessions from major trading partners such as China, Canada, and Mexico. Critics, however, countered that the levies caused market volatility and raised costs for U.S. consumers.
The latest ruling came from the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., which found that Trump’s use of the International Emergency Economic Powers Act (IEEPA) as justification was beyond the statute’s intent. The law, enacted in 1977, was designed primarily to give presidents the authority to impose sanctions, freeze assets, or restrict financial dealings with foreign adversaries during times of national emergency. It was not, the court concluded, meant to serve as a blank check for imposing tariffs or taxes on imports.
“The statute provides the president with significant tools to address unusual and extraordinary threats,” the majority opinion stated, “but none of those powers explicitly extend to levying tariffs or duties.” The court added that if Congress had intended such authority, it would have spelled it out clearly, given that taxation and trade policy have historically been under congressional control.
The decision directly impacts tariffs Trump imposed in April under his “reciprocal” trade plan, as well as the February tariffs targeting goods from China, Canada, and Mexico. However, the ruling does not affect other duties implemented under separate statutory authority, such as the steel and aluminum tariffs introduced earlier in his term.
Political Fallout and Economic Uncertainty
Trump reacted swiftly to the decision, describing the judges as partisan and warning of dire consequences if the tariffs were lifted. Writing on his social platform Truth, he insisted that reversing the measures would be “a disaster for the country,” though he expressed confidence that the Supreme Court would ultimately side with him.
The split decision reflected a clear partisan divide in the judiciary. Six of the judges in the majority were appointed by Democratic presidents, while two of the dissenters were appointed by Republicans. The ruling emphasized that constitutional authority over tariffs rests with Congress, not the White House, unless explicitly delegated.
The Trump administration has defended its position by arguing that persistent trade deficits and the flow of illicit drugs across borders constitute national emergencies under the IEEPA framework. In April, Trump declared that the long-standing imbalance between U.S. imports and exports undermined domestic manufacturing and even threatened national security. Likewise, he justified the February tariffs on grounds that foreign partners were failing to curb illegal fentanyl shipments into the United States, a claim that those countries strongly rejected.
Experts suggest the administration had anticipated this outcome and is already considering alternative strategies. Former Commerce Department official William Reinsch noted that the administration had likely anticipated the ruling and was preparing an alternative strategy, possibly relying on other laws to maintain the tariff framework. “It’s widely expected they won’t simply let these measures disappear,” he noted.
Financial markets showed little immediate reaction following the ruling, though analysts warned that uncertainty over trade policy continues to weigh on corporate decision-making. “The last thing businesses need is more unpredictability on tariffs,” said Art Hogan, a market strategist at B. Riley Wealth.
Beyond tariffs, Trump is also locked in another high-profile legal clash, seeking to remove Federal Reserve Governor Lisa Cook in a move that critics say could compromise the central bank’s independence. Observers believe both cases could converge at the Supreme Court, creating a pivotal test of presidential authority over economic matters. “We’re looking at a potential collision course between the executive branch and the judiciary,” said Josh Lipsky of the Atlantic Council. “It’s unprecedented in modern economic policy.”
The dispute began after several small businesses and a group of Democratic-led states filed lawsuits, arguing that the IEEPA does not grant authority to impose tariffs. They maintained that under the Constitution, the power to levy taxes and duties rests with Congress rather than the president. Any delegation of this authority, they contended, must be narrowly defined and cannot be assumed through vague statutory language.
Lower courts have also ruled against Trump on similar grounds, including the U.S. Court of International Trade, which concluded that the president exceeded his authority in imposing both sets of contested tariffs. With multiple challenges working their way through the legal system, the Supreme Court may ultimately be forced to resolve the issue once and for all.