A federal appeals court ruled on Friday that most of President Donald Trump's tariffs are illegal, significantly impacting his trade policy. The U.S. Court of Appeals for the Federal Circuit issued a 7-4 decision, stating that the law Trump cited to implement his tariffs, particularly the "reciprocal" tariffs, does not grant him the authority to impose such levies. The court emphasized that the power to impose tariffs lies exclusively with Congress, as outlined in the Constitution.
The court's ruling will be paused until October 14, allowing the Trump administration the opportunity to appeal to the Supreme Court. Following the decision, Trump criticized the court as "Highly Partisan" and expressed confidence that the Supreme Court would rule in his favor, warning of dire consequences if the tariffs are removed.
This ruling marks a continued legal setback for Trump in the case known as V.O.S. Selections v. Trump, which stems from lawsuits filed by multiple states and small businesses challenging the legality of Trump's tariffs under the International Emergency Economic Powers Act (IEEPA). Legal representatives for the plaintiffs argued that the decision protects American businesses and consumers from the adverse effects of these tariffs.
The ruling follows a previous decision by the U.S. Court of International Trade that also rejected the tariffs imposed under IEEPA, which included levies on imports from Canada, Mexico, and China. The appellate court found that the tariffs in question were excessively broad and not limited in duration, thereby exceeding Trump's authority.
While the dissenting judges disagreed with the majority's ruling, the impact of the decision raises questions about the future of U.S. trade policy. The appeals court's ruling was delivered amid arguments from Trump's administration regarding the potential economic benefits of the tariffs, which they claim could significantly reduce U.S. deficits.