• A federal appeals court has ruled former President Trump lacked the legal authority to impose broad tariffs under the International Emergency Economic Powers Act.
  • The tariffs remain in effect for now, with a deadline of October 14th for the administration to appeal to the Supreme Court.
  • The ruling intensifies a constitutional debate over trade powers and creates ongoing uncertainty for businesses and global supply chains.

In a significant blow to executive trade authority, the U.S. Court of Appeals for the Federal Circuit ruled 7-4 that former President Donald Trump’s use of a national emergency law to impose sweeping tariffs was unlawful. The August 29th decision states that the power to set tariffs rests with Congress, not the president, and that the International Emergency Economic Powers Act (IEEPA) was never intended for such use.

Despite the ruling, the court did not immediately invalidate the tariffs, leaving them in place while the legal process continues. The Trump administration has until mid-October to file a petition for a writ of certiorari with the U.S. Supreme Court, according to people familiar with the court’s scheduling. This means the tariffs on a wide range of goods from China, Canada, and Mexico will remain a cost factor for importers and consumers for at least several more weeks.

Trump swiftly condemned the decision on his social media platform, calling it “a disaster for our economic security” and vowing a swift appeal. The White House press office, in a brief statement, said it continues to believe the actions were “lawful and necessary” and is reviewing the full ruling with its legal team.

The legal challenge centered on whether the IEEPA, historically used to impose financial sanctions on foreign entities during emergencies, could be stretched to include blanket tariffs. The court’s majority found the statutory language did not support such a broad delegation of power from the legislative branch. “This is a foundational question about the separation of powers,” said one attorney involved in the case, who asked not to be identified because litigation is ongoing.

Business groups and trade associations, which have long argued the tariffs amounted to an unconstitutional tax on American companies and consumers, welcomed the ruling. Efforts to reach major retail and manufacturing lobbies for comment were not immediately successful, but initial statements called the decision a “step toward stability” for supply chains.

Market reaction has been muted thus far, likely because the tariffs remain in effect. However, analysts note that a final ruling against the administration could ease cost pressures on import-dependent sectors. The broader implication is that future presidents seeking to use tariffs as a primary policy tool may be forced to rely on other statutes, like Section 232 of the Trade Expansion Act, which carries its own procedural hurdles and requires more specific justifications.

The case now appears headed for the Supreme Court, setting the stage for a landmark decision on the limits of presidential power in setting trade policy. The outcome will have profound implications not only for the legacy of Trump’s protectionist agenda but also for the authority of the executive branch for years to come.