A US appeals court has ruled that most tariffs imposed by Donald Trump are unlawful. The decision delivers a major blow to his trade agenda and sets up a potential Supreme Court showdown.
The ruling cancels Trump’s “reciprocal” tariffs on dozens of nations. It also nullifies levies imposed on China, Mexico and Canada.
Court reaffirms Congress’s control over tariffs
In a 7-4 decision, the US Court of Appeals for the Federal Circuit declared the tariffs “invalid as contrary to law”.
Judges rejected Trump’s argument that the International Emergency Economic Powers Act allowed him to act. They emphasized that only Congress has the constitutional authority to impose tariffs.
The ruling will take effect on 14 October unless the Supreme Court intervenes.
Trump attacks the decision
Trump condemned the ruling on Truth Social. He warned that removing the tariffs would “literally destroy the United States”.
He accused the appeals court of partisanship and said the tariffs were essential to maintain national and financial strength. Trump predicted the country would ultimately prevail.
Emergency powers defense dismissed
Trump had justified his tariffs under the IEEPA. He declared a trade emergency, claiming deficits threatened national security.
The court disagreed. In its 127-page opinion, it stated 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.
Lawsuits from states and businesses
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 nation. They also introduced “reciprocal” tariffs on dozens of others. 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 overturned
The appeals court also invalidated tariffs on Canada, Mexico and China. Trump had argued they were necessary to curb drug imports.
Tariffs on steel and aluminium remain in effect. They were imposed under separate presidential authority.
White House warns of economic consequences
Before the ruling, White House lawyers warned of severe financial risks. They said removing the tariffs could trigger a collapse similar to 1929.
They argued the US might fail to repay trillions already pledged by foreign partners. Such a scenario could weaken national security and harm the economy.
The decision also casts doubt on trade agreements 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 actions taken without explicit congressional approval.
During Joe Biden’s presidency, the court blocked climate regulations and struck down 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 justices could 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 shape a ruling that may redefine presidential authority over trade for years to come.
