In a landmark decision that could reshape U.S. trade policy, the U.S. Court of Appeals for the Federal Circuit ruled on Friday that many of the tariffs imposed by President Trump earlier this year did not align with the legal bounds set by federal economic emergency laws. This ruling, while not an immediate injunction against Trump’s tariffs, represents a significant setback for what has been a hallmark of his trade strategies.
The legal confrontation began when President Trump issued a series of executive orders in April, levying a 10% baseline tariff on imports from almost every country, with higher reciprocal tariffs targeted at dozens of nations. In addition to these broad measures, Trump specifically implemented tariffs against goods from Canada, Mexico, and China, aiming to pressure these countries into taking stricter action against fentanyl trafficking and unauthorized immigration.
Despite the tariffs remaining in effect for now, the decision, which won’t activate until October, offers a window for the Trump administration to escalate the matter to the Supreme Court. Reacting to the appellate court’s 7-4 decision, President Trump voiced his dissent on Truth Social, deeming the court “Highly Partisan” and warning that if upheld, the decision “would literally destroy the United States of America.”
Attorney General Pam Bondi also expressed discontent, asserting that the ruling “undermines the United States on the world stage,” and interferes with “the President’s vital and constitutionally central role in foreign policy.” She vowed an appeal, emphasizing the administration’s stance on the necessity of such tariffs for national security and economic interests.
The legal challenge to the tariffs was primarily spearheaded by Democratic states and small businesses that argued Trump’s sweeping tariffs were not validly enacted. They claimed that the International Emergency Economic Powers Act of 1977 (IEEPA), which Trump cited as his legal basis, does not explicitly authorize the imposition of tariffs and historically has been used for imposing sanctions rather than tariffs.
The U.S. Court of Appeals echoed this perspective, pointing out that Congress, not the presidency, traditionally holds the power to levy tariffs. They concluded that it was “unlikely” that Congress intended to grant the President such wide-reaching powers to impose tariffs under IEEPA without explicit mention and necessary procedural safeguards.
Previously, the U.S. Court of International Trade had delivered a similar verdict in May, finding the imposition of these tariffs unlawful and ordering a halt which was temporarily stayed pending appeal.
While affirming the lower court’s decision on the unlawfulness of the tariffs, the appellate court also suggested a reevaluation regarding the extent of the relief provided, hinting at a potential deviation from imposing a universal injunction. This follows a trend seen in the Supreme Court’s recent caution against universal injunctions, seen in decisions on other politically charged issues like birthright citizenship.
President Trump, meanwhile, has positioned tariffs as a pivotal element of his economic strategy since his return to office. Initiated ostensibly as a corrective measure against countries with unfair trade practices, Trump has employed tariffs to influence foreign policy goals across various fronts. From using tariffs to incentivize China to regulate fentanyl to pressing Canada and Mexico on immigration issues, and even influencing Brazil and India’s international policies, Trump’s use of tariffs has been comprehensive and controversial.
However, these trade policies have not been without their critics. Economists and political analysts argue that Trump’s aggressive tariff strategy could hamper global economic growth, elevate consumer prices, and destabilize financial markets. Even though major indices have since recovered from a decline following the initial shock of April’s “Liberation Day” tariffs, the broader implications on the economy remain a concern.
Critics also contend that Trump’s invocation of IEEPA for imposing tariffs stretches beyond the legislative intent and constitutional powers granted to the President. Such legal challenges rely on principles like the “major questions doctrine,” which mandates clear congressional authorization for decisions carrying significant economic or political implications.
The ongoing legal battles and robust political discourse highlight the complex interplay between national security, international trade, and constitutional authority. As the Trump administration prepares to take the case potentially to the Supreme Court, the outcome will not only decide the fate of Trump’s tariffs but also set a precedent for the boundaries of presidential power in economic domains.
