Federal Court Deals Blow to Trump’s Tariff Power, But Fight Isn’t Over
A federal appeals court ruled on Friday that former US President Donald Trump exceeded his legal authority when imposing sweeping tariffs on goods from nearly every country worldwide. However, the court stopped short of immediately dismantling the tariffs, allowing the administration to appeal to the Supreme Court by mid-October.
The US Court of Appeals for the Federal Circuit found that Trump overstepped the bounds of an emergency powers law, a critically important legal setback that largely affirmed a May decision from a specialized federal trade court in Washington.
white House spokesman Kush Desai asserted that Trump had acted within the law, adding, “we look forward to ultimate victory on this matter.”
The case centers on two sets of import taxes justified by Trump through declarations of national emergency under the 1977 International Emergency Economic Powers Act (IEEPA). The first, announced on April 2, 2025 – dubbed “Liberation Day” by Trump – imposed “reciprocal” tariffs of up to 50% on countries with which the US runs trade deficits, alongside a 10% baseline tariff on all others. the second set, announced in February 2025, targeted imports from Canada, China, and Mexico, aiming to curb the flow of illegal drugs and immigrants.
The court’s decision has sparked reactions from various stakeholders. An attorney representing small businesses impacted by the tariffs stated that the ruling confirms Trump did not have unfettered power to impose these levies. “This decision protects American businesses and consumers from the uncertainty and harm caused by these unlawful tariffs,” said Jeffrey Schwab, director of litigation at the Liberty Justice Center.
Though,the practical impact of the ruling remains uncertain.national Foreign Trade Council President Jake Colvin cautioned that businesses may not immediately feel any effects. “If these tariffs are ultimately struck down, it ought to serve as a wake-up call for Congress to reclaim its constitutional mandate to regulate duties and bring some long-term certainty for U.S. businesses and relief for consumers,” Colvin said.
Democratic Senator Ron Wyden of Oregon announced plans to push for votes to repeal what he called “harmful, regressive taxes.”
The ruling complicates Trump’s broader ambition to reshape American trade policy unilaterally. While option laws exist for imposing import taxes, they would restrict the speed and scope of his actions. His tariffs – and the unpredictable manner in which they were implemented – have destabilized global markets, strained relationships with US allies, and fueled concerns about rising prices and slower economic growth.
However,Trump has also leveraged the tariffs to pressure countries like the European Union and Japan into accepting trade deals favorable to the US,and to generate billions of dollars in revenue to offset tax cuts enacted in July 2025. According to one legal expert, Ashley Akers, senior counsel at Holland & Knight, “the administration could lose a pillar of its negotiating strategy.”
A dissenting opinion from some judges suggests a potential legal pathway for Trump, arguing that the 1977 law does not constitute an unconstitutional delegation of legislative authority. The government also warned that striking down the tariffs could necessitate refunds of collected import taxes,potentially causing “financial ruin” for the United States. Revenue from tariffs currently totals $159 billion,more than double the amount collected during the same period last year.
The legal challenge does not extend to other Trump-era tariffs, including those on steel, aluminum, and automobiles imposed on national security grounds, or those levied on China during his first term and maintained by the Biden administration due to unfair trade practices.trump could potentially invoke alternative authorities, such as Section 122 or Section 301 of the Trade Act of 1974, to reimpose import taxes, though these options are more limited in scope.
Protests have erupted in response to the tariffs, with activists in Kolkata, India, burning effigies of Trump on August 13, 2025, and demonstrations taking place in São Paulo, Brazil, on August 1, 2025, highlighting concerns about national sovereignty. Similar rallies were held in Canada on April 26, 2025, as workers protested the potential impact on Canadian jobs.
The outcome of the anticipated Supreme Court appeal will be pivotal in determining the future of US trade policy and the extent of presidential authority in this critical economic domain.
