A US appeals court has ruled that most tariffs imposed by Donald Trump are unlawful. The decision represents a major setback for his trade policies and points toward a Supreme Court showdown.
The ruling cancels Trump’s “reciprocal” tariffs applied to dozens of countries. It also overturns levies on China, Mexico and Canada.
Judges affirm Congress controls tariffs
In a 7-4 decision, the US Court of Appeals for the Federal Circuit declared the tariffs “invalid as contrary to law”.
The court rejected Trump’s claim that the International Emergency Economic Powers Act gave him authority. Judges emphasized that only Congress has the power to set tariffs.
The ruling will take effect on 14 October unless the Supreme Court intervenes.
Trump criticizes the court
Trump condemned the decision on Truth Social. He warned that removing the tariffs would “literally destroy the United States”.
He called the appeals court partisan and argued the tariffs were essential for national and financial strength. Trump predicted America would ultimately prevail.
Emergency powers argument rejected
Trump had defended his tariffs under the IEEPA. He declared a trade emergency, claiming deficits threatened national security.
The court disagreed. In its 127-page ruling, it said the IEEPA “neither mentions tariffs nor limits presidential authority to impose them”.
Judges noted that Congress has historically reserved tariff powers and only delegates them explicitly.
States and businesses drive lawsuits
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 called the move America’s “liberation day” from unfair trade.
The Court of International Trade had already ruled the tariffs unlawful, though that ruling was paused during appeal.
Tariffs on allies and China struck down
The appeals court also removed tariffs on Canada, Mexico and China. Trump had argued they were necessary to prevent drug imports.
Tariffs on steel and aluminium remain in place. They were enacted under separate presidential authority.
White House warns of economic fallout
Before the ruling, White House lawyers warned of severe consequences. 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 crisis, they warned, could weaken national security and damage the economy.
The decision also casts doubt on trade deals where countries accepted lower tariffs in exchange for concessions.
Supreme Court battle looms
The case now appears headed to the Supreme Court. The justices have recently limited presidents who acted without clear congressional approval.
During Joe Biden’s presidency, the court blocked climate regulations and struck down student debt relief. Both relied on the “major questions doctrine”.
The Supreme Court must now decide whether Trump’s tariff program was lawful executive action or executive overreach.
Conservative majority may decide outcome
Trump lost at the appeals court, where only three of eleven judges were Republican appointees.
The Supreme Court, however, has six conservative justices, including three appointed by Trump himself.
That majority could shape a ruling that may redefine presidential authority over trade policy for years to come.
