Trump’s Tariff Empire Crumbles: Appeals Court Rules Emergency Powers Misused

In a significant blow to President Donald Trump’s trade agenda, the U.S. Court of Appeals for the Federal Circuit ruled 7-4 on Friday that his use of emergency powers to impose sweeping tariffs on nearly all U.S. trading partners was illegal. The decision, which upholds a May ruling by the U.S. Court of International Trade in New York, found that Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA) of 1977, a law never before used by any president to justify tariffs.

The court’s 127-page ruling declared that the IEEPA, which grants the president authority to address “unusual and extraordinary” threats during national emergencies, does not explicitly authorize tariffs. “It seems unlikely that Congress intended, in enacting IEEPA, to grant the President unlimited authority to impose tariffs,” the majority wrote, emphasizing that the Constitution vests Congress with the power to impose taxes and tariffs.

The ruling targets two sets of tariffs: the “Liberation Day” tariffs announced on April 2, imposing up to 50% “reciprocal” tariffs on countries with U.S. trade deficits and a 10% baseline on others, and the “trafficking tariffs” imposed on February 1 targeting Canada, China, and Mexico to address alleged drug and migrant flows. The court found these tariffs, justified by Trump as responses to national emergencies, lacked legal grounding, as trade deficits and border issues do not meet the IEEPA’s threshold for “unusual and extraordinary” threats.

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Despite the ruling, the court delayed enforcement until October 14, allowing the Trump administration time to appeal to the U.S. Supreme Court, an action the president vowed to pursue. In a fiery post on Truth Social, Trump called the decision “highly partisan” and warned it would “literally destroy the United States of America” if upheld, predicting economic ruin akin to the 1929 Great Depression. White House spokesman Kush Desai expressed confidence in an eventual victory, asserting that Trump acted lawfully.

The tariffs, which generated $159 billion in revenue by July—more than double the previous year’s figure—have been a cornerstone of Trump’s strategy to reshape global trade, pressure allies like the EU and Japan into one-sided deals, and fund tax cuts signed into law on July 4. However, they have disrupted global markets, raised fears of higher prices, and drawn legal challenges from five small businesses and 12 Democratic-led states, who argued the tariffs harmed U.S. businesses and consumers.

Critics, including the Liberty Justice Center, which represented the businesses, hailed the ruling as a check on presidential overreach, noting that IEEPA was historically used for sanctions, not tariffs. The court’s decision does not affect other Trump tariffs, such as those on steel, aluminum, and autos imposed under national security provisions or earlier China tariffs retained by President Joe Biden.

The ruling casts uncertainty over Trump’s trade deals, which rely on IEEPA authority, potentially emboldening foreign governments to resist or renegotiate terms, according to Ashley Akers, a former Justice Department lawyer. The Justice Department warned that striking down the tariffs could force refunds of collected duties, risking “financial ruin” for the U.S. Treasury.

As the case heads toward a likely Supreme Court showdown, the 6-3 conservative-leaning court’s stance remains uncertain, given its recent skepticism of expansive executive powers. The outcome could redefine the balance of trade authority between Congress and the president, with significant implications for U.S. economic policy and global trade relations.

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