A US appeals court has struck down most tariffs imposed by Donald Trump. The decision represents a major defeat for his trade agenda and points to a potential Supreme Court showdown.
The ruling cancels Trump’s “reciprocal” tariffs on dozens of countries. It also invalidates levies on China, Mexico and Canada.
Court emphasizes Congress controls tariffs
In a 7-4 decision, the US Court of Appeals for the Federal Circuit declared the tariffs “invalid as contrary to law”.
Judges rejected Trump’s claim that the International Emergency Economic Powers Act granted him authority. They stressed that Congress has the exclusive power to impose tariffs.
The ruling will take effect on 14 October unless the Supreme Court intervenes.
Trump attacks decision
Trump criticized the ruling on Truth Social. He warned that removing the tariffs would “literally destroy the United States”.
He accused the appeals court of bias and said the tariffs were vital for national and financial strength. Trump predicted America would ultimately prevail.
Emergency powers argument rejected
Trump had defended the tariffs under the IEEPA. He declared a trade emergency, claiming deficits threatened US security.
The court disagreed. In its 127-page opinion, it wrote that the IEEPA “neither mentions tariffs nor limits presidential authority to impose them”.
Judges emphasized that Congress has always reserved tariff powers and only delegates them explicitly.
Legal challenges from states and businesses
Two lawsuits prompted the case. Small businesses and a coalition of states challenged Trump’s April executive orders.
The orders imposed a 10% tariff on nearly every country. They also added “reciprocal” tariffs on dozens of nations. Trump described the move as America’s “liberation day” from unfair trade.
The Court of International Trade had already ruled the tariffs unlawful, though that ruling was paused during the appeal.
Tariffs on allies and China nullified
The appeals court also struck down tariffs on Canada, Mexico and China. Trump argued they were necessary to prevent drug imports.
Tariffs on steel and aluminium remain in force. They were imposed under separate presidential authority.
White House warns of financial consequences
Before the ruling, White House lawyers predicted severe economic impacts. They said removing the tariffs could trigger a financial collapse similar to 1929.
They argued the US might fail to repay trillions already committed by foreign partners. Such a scenario, they warned, could weaken national security and damage the economy.
The decision also casts doubt on trade deals where countries accepted lower tariffs in exchange for concessions.
Supreme Court likely to intervene
The case now appears headed to the Supreme Court. The justices have recently restricted presidential powers when actions lack explicit congressional approval.
During Joe Biden’s presidency, the court blocked climate regulations and struck down student debt relief under the “major questions doctrine”.
The Supreme Court must now decide whether Trump’s tariff program was lawful executive action or presidential overreach.
Conservative majority may shape outcome
Trump lost in the appeals court, where only three of eleven judges were Republican appointees.
The Supreme Court has six conservative justices, including three appointed by Trump himself.
That majority could influence a ruling that may redefine presidential authority over trade policy for years to come.
