A US appeals court on Saturday ruled that most of President Donald Trump’s tariffs are illegal, dealing a major blow to one of his key economic policy tools. Despite the ruling, the tariffs will remain in effect until October 14, allowing the administration time to appeal the decision before the Supreme Court.
In its judgment, the US Court of Appeals for the Federal Circuit in Washington DC, said Trump had overstepped his authority by imposing the tariffs under emergency powers laws.
“The statute bestows significant authority on the President to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax,” the court’s order said, reported Reuters.
The ruling applies to what Trump describes as “reciprocal” tariffs introduced in April as part of his trade war, and a separate set of tariffs announced in February against China, Canada and Mexico.
However, other tariffs, such as those on steel and aluminum imposed under different statutes, are unaffected.
{{/usCountry}}However, other tariffs, such as those on steel and aluminum imposed under different statutes, are unaffected.
{{/usCountry}}Trump, in his first reaction, underlined that all tariffs are still in effect, and he expected “help” from the Supreme Court to keep them so. He called the appeals court “partisan” and its decision “incorrect”. He also made a nationalistic pitch for tariffs as a matter of win or loss for the US, and said tariffs are “the best tool” to support Made in America products.
Earlier, Trump had justified his measures under the International Emergency Economic Powers Act (IEEPA), a 1977 law historically used to impose sanctions or freeze assets during national emergencies. He was the first US president to invoke IEEPA to impose tariffs.
“It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs,” the court ruling added.
According to Reuters, the treasury department, the US trade representative’s office and the commerce department did not immediately comment on the decision.
Legal challenges pile up
The US court's decision comes in response to two lawsuits: one filed by five small US businesses and another by 12 Democratic-led states, both contending that IEEPA does not authorize tariffs.
The lawsuit argued that, the Constitution assigns Congress, not the president, the power to impose taxes and tariffs, and any delegation of that authority must be explicit and limited.
The New York-based US Court of International Trade had already ruled on May 28 that Trump exceeded his authority in imposing the tariffs, a decision issued by a three-judge panel that included one Trump appointee. Another Washington court has reached a similar conclusion, and the government has appealed.
At least eight lawsuits have challenged Trump’s tariff policies as of now, including one brought by California.