Federal Appeals Court Declares Trump’s Tariffs Illegal: What Lies Ahead

Tue Sep 16 2025 01:20:24 GMT+0300 (Eastern European Summer Time)

A recent ruling by a federal appeals court has deemed Donald Trump's widespread tariffs an unlawful exercise of presidential power, igniting potential economic ramifications and a looming Supreme Court challenge. The decision casts uncertainty over trade policies and could reshape economic relations globally.

In a decisive 7-4 ruling, the US Court of Appeals has deemed most of Donald Trump's tariffs an overreach of presidential authority under the International Emergency Economic Powers Act (IEEPA). The court's decision is poised to have far-reaching implications, impacting the US economy, global trade relationships, and the future of Trump's administration. The case is expected to escalate to the US Supreme Court, where it could redefine the president's power regarding international trade.

A federal appeals court has ruled that most of Donald Trump's tariffs are an overreach of his use of emergency powers as president.

The so-called reciprocal tariffs - imposed on nearly every country the US trades with - are being illegally imposed, the US Court of Appeals said on Friday.

The decision upholds a ruling in May from the Court of International Trade, which also rejected Trump's argument that his global tariffs were permitted under an emergency economic powers act.

Many of the tariffs affected by the ruling stem from an April announcement of a flat 10% rate on imports from all countries, which Trump stated was intended to even out 'unfair' trade relations with the U.S.

The court did not halt the tariffs but instead said they would remain in place until mid-October, setting up a further legal challenge in the US Supreme Court.

In its 7-4 decision, the appellate court backed a lower court's finding that Trump did not have the authority to impose global tariffs.

This was largely attributed to the law Trump used to justify the policies, the International Emergency Economic Powers Act (IEEPA), which the judges concluded did not grant 'the power to impose tariffs, duties, or the like, or the power to tax'.

The court stated that the emergency law 'did not give the president wide-ranging authority to impose tariffs', emphasizing that 'the power of the purse (including the power to tax) belongs to Congress'.

The court's ruling not only presents a significant setback for Trump's administration but could also have immediate repercussions on the US economy and international markets.

Businesses face uncertainty as tariffs impact import costs, potentially affecting consumer prices and profit margins. As stakeholders await the Supreme Court's decision regarding the next steps in this contentious legal battle, the ramifications for existing trade agreements remain to be seen.