Most of President Donald Trump’s global tariffs were ruled illegal by a federal appeals court that found he exceeded his authority by imposing them through an emergency law, but the judges let the levies stay in place while the case proceeds.
The US Court of Appeals for the Federal Circuit on Friday upheld an earlier ruling by the Court of International Trade that Trump wrongfully invoked the law to hit nations across the globe with steep tariffs. But the appellate judges said the lower court should revisit its decision to block the tariffs for everyone, rather than just the parties in the case.
“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,” the court said.
Friday’s 7-4 decision extends the suspense over whether Trump’s tariffs will ultimately stand. The case had been expected to next go to the Supreme Court for a final ruling. The administration could now turn to the justices, who have largely backed the president on other matters. But the White House could also let the Court of International Trade revisit the matter first.
‘Total Disaster’
“ALL TARIFFS ARE STILL IN EFFECT!” Trump said in a post on Truth Social shortly after the decision was issued.
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“Today a Highly Partisan Appeals Court incorrectly said that our Tariffs should be removed, but they know the United States of America will win in the end,” the president said. “If these Tariffs ever went away, it would be a total disaster for the Country.”
Trillions of dollars of global trade are embroiled in the legal fight. A final ruling tossing Trump’s tariffs would upend his much-ballyhooed trade deals. The administration also would be forced to contend with demands to refund tariffs that were already paid.
In telling the lower court to reconsider how broadly its ruling should apply, the Federal Circuit pointed to the Supreme Court’s recent decision on Trump’s efforts to restrict automatic birthright citizenship. That ruling barred federal judges from issuing so-called universal injunctions that go beyond the parties in a case and apply nationwide.”
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Birthright Citizenship
But the Supreme Court left open the possibility that judges in some cases could use other legal mechanisms to reach the same outcome. Indeed, several judges re-issued nationwide injunctions against Trump’s birthright citizenship restrictions, saying the sweeping orders were still appropriate under the new Supreme Court standard.
The two cases at the centre of the ruling were filed by Democratic-led states and a group of small businesses. They have argued all along that a ruling against the tariffs must apply across the nation. That issue may now become a focus of further arguments.
The tariff cases challenged Trump’s use of the International Emergency Economic Powers Act to sidestep Congress and issue the tariffs, arguing that he did so to force trading partners to negotiate rather than to address any legitimate national emergency. IEEPA does not mention tariffs and had never been used in such a manner.
“Notably, when drafting IEEPA, Congress did not use the term ‘tariff’ or any of its synonyms, like ‘duty’ or ‘tax,’” the court said. “There are numerous statutes that do delegate to the President the power to impose tariffs; in each of these statutes that we have identified, Congress has used clear and precise terms to delegate tariff power.”
Tim Brightbill, a trade attorney at Wiley Rein who isn’t involved in the case, said the appeals court had concluded that even if IEEPA had permitted the president tariff powers, “the government exceeded its authority with the breadth and scope of these worldwide tariffs.”
Additional Tariffs
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Administration officials have prepared options to pursue additional tariffs through other federal authorities, even amid an expected appeal, according to a person familiar.
The administration had already turned increasingly to Section 232 of the Trade Expansion Act to pursue levies against categories of goods, from lumber to semiconductors.
Other legal options lack the swift, immediate impact of the president’s original maneuver under IEEPA, which has fewer hurdles because it’s intended to be used in emergencies.
In its May 30 ruling, the Court of International Trade found Trump improperly used IEEPA to impose the tariffs, agreeing that such power is vested in Congress by the Constitution. The Federal Circuit judges similarly signaled scepticism of Trump’s claim of broad tariff authority under IEEPA during July 31 oral arguments.
Fearing that the court might rule the tariffs illegal and invalidate them immediately, the administration earlier on Friday filed statements by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Secretary of State Marco Rubio warning of dire foreign-policy consequences if the court took such action. Bessent said it would lead to “dangerous diplomatic embarrassment” for the US.
‘Economic Security’
“President Trump lawfully exercised the tariff powers granted to him by Congress to defend our national and economic security from foreign threats,” White House spokesman Kush Desai said in a statement. “The President’s tariffs remain in effect, and we look forward to ultimate victory on this matter.”
In a twist, the Federal Circuit cited earlier Supreme Court rulings that blocked former President Joe Biden’s efforts to tackle climate change and wipe out hundreds of billions of dollars in student debt.
The conservative majority in those cases said those policies ran afoul of a legal concept known as the “major questions doctrine,” which holds that federal agencies need clear congressional authorization before deciding on sweeping political and economic matters. IEEPA doesn’t include that kind of clear language on tariffs, the court held.
“The executive’s use of tariffs qualifies as a decision of vast economic and political significance, so the government must ‘point to clear congressional authorization’ for its interpretation of IEEPA,” the appeals court said.
The rarely cited law has typically been used to levy sanctions and asset freezes during national emergencies.
The ruling applies to Trump’s “Liberation Day” global tariffs that were set at a 10% baseline and have been in effect for months purportedly to address the US trade deficits. The decision also affects the extra levies on Mexico, China and Canada that Trump said were justified by the ongoing fentanyl crisis in the US.
The decision also covers Trump’s so-called reciprocal tariffs that took effect Aug 7 for dozens of nations that failed to reach trade deals with the administration by Aug 1. Various carve-outs and extensions have been announced since then, leaving the final tariffs for some nations up in the air.
The states and businesses argue that trade deficits are a persistent part of the US economy and therefore not an emergency, and that the fentanyl-related tariffs are a dressed-up negotiating tactic rather than a legitimate effort to stem the flow of drugs.
The case is V.O.S. Selections v. Trump, 25-1812, 25-1813, US Court of Appeals, Federal Circuit.
