A US appeals court has ruled that most tariffs imposed by Donald Trump are illegal. The decision marks a major setback for his trade policies and sets up a likely Supreme Court showdown.
The ruling cancels Trump’s “reciprocal” tariffs on dozens of countries. It also nullifies levies applied to China, Mexico and Canada.
Court affirms Congress holds tariff authority
In a 7-4 decision, the US Court of Appeals for the Federal Circuit called the tariffs “invalid as contrary to law”.
Judges rejected Trump’s claim that the International Emergency Economic Powers Act allowed him to act. They emphasized that only Congress has the power to impose tariffs.
The ruling will take effect on 14 October unless the Supreme Court intervenes.
Trump blasts ruling
Trump condemned the decision on Truth Social. He warned that removing the tariffs would “literally destroy the United States”.
He accused the appeals court of partisanship and argued the tariffs were essential to national and financial strength. Trump predicted the country would ultimately prevail.
Emergency powers argument dismissed
Trump had justified the tariffs under the IEEPA. He declared a trade emergency, claiming deficits threatened national security.
The court rejected this reasoning. In its 127-page opinion, it wrote that the IEEPA “neither mentions tariffs nor limits presidential authority to impose them”.
Judges stressed that Congress has historically reserved tariff powers and only delegates them explicitly.
States and businesses challenge tariffs
Two lawsuits triggered the case. Small businesses and a coalition of states challenged Trump’s April executive orders.
The orders imposed a 10% tariff on nearly every country. They also introduced “reciprocal” tariffs on dozens more. Trump described the move as America’s “liberation day” from unfair trade.
The Court of International Trade had previously ruled the tariffs unlawful, though that decision was paused during the appeal.
Tariffs on Canada, Mexico and China struck down
The appeals court also removed tariffs on Canada, Mexico and China. Trump had argued they were needed to prevent drug imports.
Tariffs on steel and aluminium remain in effect. They were enacted under a separate presidential authority.
White House warns of economic risks
Before the ruling, White House lawyers predicted severe consequences. They said removing the tariffs could trigger a financial collapse similar to 1929.
They argued the US might fail to repay trillions already pledged by foreign partners. Such a scenario, they said, could weaken national security and harm the economy.
The ruling also casts doubt on trade deals where countries accepted reduced tariffs in exchange for concessions.
Supreme Court likely to intervene
The case now appears headed to the Supreme Court. The justices have recently limited presidential powers when actions lack explicit congressional approval.
During Joe Biden’s presidency, the court blocked climate regulations and student debt relief under the “major questions doctrine”.
The Supreme Court must now decide whether Trump’s tariff program was lawful executive action or presidential overreach.
Conservative majority may determine outcome
Trump lost in the appeals court, where only three of eleven judges were Republican appointees.
The Supreme Court has six conservative justices, including three appointed by Trump himself.
That majority could play a decisive role in a ruling that may reshape presidential authority over trade policy for years.
