A US appeals court has ruled that most tariffs introduced by Donald Trump were illegal. The decision strikes at the core of his trade policy and sets up a likely battle before the Supreme Court.
The judgement applies to Trump’s “reciprocal” tariffs placed on dozens of countries. It also covers levies aimed at China, Mexico and Canada.
Judges dismiss Trump’s defence
In a 7-4 ruling, the US Court of Appeals for the Federal Circuit rejected Trump’s legal reasoning. The judges declared the tariffs “invalid as contrary to law”.
They dismissed his argument that the International Emergency Economic Powers Act granted him authority. The court stressed that the power to impose tariffs belongs to Congress.
The ruling will come into force on 14 October unless overturned by the Supreme Court.
Trump warns of national collapse
Trump condemned the ruling on Truth Social. He claimed that striking down the tariffs would “literally destroy the United States”.
He accused the court of partisanship and predicted victory for his position. Trump argued the country must remain financially strong to survive global competition.
Emergency law argument fails
Trump had invoked the IEEPA to justify his actions. He declared a trade emergency and said imbalances endangered US security.
The court disagreed. In a 127-page opinion, it said the law “neither mentions tariffs nor limits presidential power in this area”.
The judges underlined that Congress has always controlled tariff-setting and only grants such powers through clear language.
Lawsuits from businesses and states
The case grew out of two lawsuits. Small businesses and a coalition of states challenged Trump’s April executive orders.
His orders imposed a 10% tariff on almost all countries. They also introduced “reciprocal” tariffs against dozens more. Trump described the move as America’s “liberation day” from unfair trade.
The Court of International Trade had already struck down the tariffs in May, though that decision was paused during the appeal.
Tariffs on neighbours and China overturned
The appeals court decision removes tariffs on Canada, Mexico and China. Trump had defended them as tools to block drug imports.
Tariffs on steel and aluminium, however, remain intact. They were enacted under a different presidential authority.
White House warns of economic shock
Before the ruling, White House lawyers warned of severe risks. They said cancelling the tariffs could cause a collapse similar to 1929.
They argued the US might fail to repay trillions already promised by foreign partners. Such failure, they said, could create financial ruin and weaken national security.
The decision also raises doubts about trade deals that countries signed in exchange for reduced tariff rates.
Supreme Court battle on horizon
The case is expected to move to the Supreme Court. The justices have repeatedly curbed presidents who sought sweeping powers without congressional approval.
Under Joe Biden, the court struck down climate rules for power plants and blocked student debt relief. Both decisions relied on the “major questions doctrine”.
Now the top court could decide whether Trump’s tariff programme represents unlawful overreach or a lawful use of authority.
Conservative tilt may prove decisive
The appeals court included only three Republican appointees among eleven judges. Trump lost there.
The Supreme Court, however, has a strong conservative majority. Six of nine justices are Republicans, including three nominated by Trump.
This balance could shape a ruling that may redefine presidential authority over trade.
