WASHINGTON, D.C. – A US federal appeals court on Friday dealt a major blow to President Donald Trump’s trade policy, ruling that many of the sweeping tariffs he imposed under emergency powers were unlawful — but allowing them to remain in force for now.
In a 7-4 decision, the US Court of Appeals for the Federal Circuit upheld a lower court’s finding that Trump exceeded his authority by invoking the International Emergency Economic Powers Act (IEEPA) to justify global levies.
Judges, however, froze the ruling until mid-October, giving the White House time to appeal to the Supreme Court.
Trump, who has relied heavily on tariffs since returning to office in January, vowed to fight the decision.
“The appeals court incorrectly said that our tariffs should be removed, but they know the United States of America will win in the end,” he said in a post on his Truth Social platform, adding he would press his case “with the help of the United States Supreme Court.”
Billions at Stake
The ruling raises uncertainty over billions of dollars in duties collected by the US government since Trump introduced the tariffs, which include a 10% baseline levy on nearly all trading partners and higher rates for dozens of economies.
While the case did not touch on sector-specific tariffs covering steel, aluminum, autos and other imports, it directly challenges Trump’s signature “reciprocal tariffs” policy and duties linked to cross-border drug trafficking.
The appeals court found that the IEEPA does not explicitly authorize a president to impose tariffs, noting:
“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.”
White House Pushback
Administration officials had lobbied the court to keep the tariffs in place, warning of potential chaos if they were suddenly lifted.
Commerce Secretary Howard Lutnick cautioned that striking them down could “threaten broader US strategic interests at home and abroad” and unravel trade deals already struck.
Treasury Secretary Scott Bessent went further, warning the suspension would be a “dangerous diplomatic embarrassment.”
Foreign Fallout
The ruling could complicate Trump’s negotiations with the European Union, China, Canada, and Mexico, all of whom have been hit with punitive duties since he resumed office.
It may also embolden countries considering retaliatory measures if the Supreme Court ultimately rejects Trump’s approach.
For now, businesses and trading partners must brace for continued uncertainty. If the tariffs are struck down for good, US firms could seek refunds — potentially running into the billions.
