A federal appeals court has ruled that most of Donald Trump’s tariffs represent an unlawful use of presidential emergency powers, striking a major blow to one of his flagship economic policies.
In a 7-4 decision delivered Friday, the U.S. Court of Appeals said the former president exceeded his authority when imposing so-called “reciprocal tariffs” on nearly every trading partner of the United States. The judges concluded that the International Emergency Economic Powers Act (IEEPA), the statute Trump relied on to justify his actions, does not give the president the right to levy duties or taxes.
The decision upholds a lower court ruling issued in May, which first found the tariffs invalid. However, the appellate judges stopped short of immediately lifting them, allowing the measures to remain in place until mid-October. That sets up a likely high-stakes showdown before the U.S. Supreme Court.
Trump quickly denounced the ruling on Truth Social, branding the appeals court “highly partisan” and calling the judgment a “disaster” for the nation. He warned that if the decision stands, it would “literally destroy the United States of America.”
At the center of the case is the IEEPA, a 1977 law that grants U.S. presidents wide-ranging authority to act in response to foreign threats. Past administrations have used the law to impose sanctions on adversaries, most notably Barack Obama and Joe Biden against Russia following its aggression in Ukraine. But the appeals court said the IEEPA “neither mentions tariffs nor provides safeguards that allow the president to impose them,” making Trump’s sweeping trade duties unlawful.
When he unveiled the tariffs, Trump argued that trade imbalances endangered U.S. national security, making them a matter of emergency. But the court disagreed, saying the power to impose taxes or tariffs lies with Congress. “The power of the purse belongs to the legislature,” the decision stated, underlining that the president had overstepped.
The ruling introduces significant uncertainty into both the U.S. economy and global markets. Businesses are bracing for potential volatility as they await the Supreme Court’s response. “Countries may hesitate to conduct new business with the U.S. until there is clarity,” said Dr. Linda Yueh, an economist at Oxford University. “That uncertainty could dampen economic activity in the near term.”
If the Supreme Court upholds the decision, it could force the White House to refund billions of dollars collected from import taxes. Trade agreements already secured with allies like the UK, Japan, and South Korea could also be thrown into question, along with ongoing negotiations.
On the other hand, if the court sides with Trump, it would set a precedent dramatically expanding presidential power under emergency laws, potentially allowing future administrations to bypass Congress on taxation and trade. With six of the nine justices appointed by Republican presidents—including three nominated by Trump himself—the case could be pivotal.
The Supreme Court has at times reined in presidential overreach. Under Joe Biden, justices struck down student loan forgiveness and efforts to regulate greenhouse gas emissions, invoking the “major questions doctrine” to argue that such sweeping actions require explicit congressional approval. Whether Trump’s tariffs fall under the same reasoning remains uncertain.
For now, the reciprocal tariffs will stay in place until October 14. Other levies, including Trump’s separate tariffs on steel, aluminium, and copper, imposed under different legal authority, are unaffected by the ruling and remain intact.
Politically, the appeals court decision could reshape Trump’s narrative as he campaigns on economic nationalism. If the Supreme Court affirms the ruling, it would undermine his image as a strong dealmaker. But a reversal would hand him a powerful victory and reinforce his claim that tariffs are essential to strengthening U.S. industry.
With the case now headed to America’s highest court, the future of Trump’s trade policy—and the balance of presidential power over the economy—hangs in the balance.
