U.S. Appeals Court Rules 7-4 Against Most Trump Tariffs, Citing Overreach of Presidential Authority

A U.S. federal appeals court on Friday, August 29, 2025, ruled that most of President Donald Trump's global tariffs were illegally imposed, marking a significant legal setback for his administration's trade policy. The U.S. Court of Appeals for the Federal Circuit, in a 7-4 decision, affirmed a lower court's finding that President Trump had exceeded his authority by using emergency economic powers to levy broad duties. The court, however, allowed the tariffs to remain in effect until mid-October, providing time for the case to be appealed to the Supreme Court.

The ruling centered on tariffs imposed under the International Emergency Economic Powers Act (IEEPA), which grants the president significant authority during national emergencies but does not explicitly include the power to impose tariffs or taxes. The court noted that the power to impose taxes, such as tariffs, is primarily vested in the legislative branch by the Constitution. This decision challenges the administration's interpretation of the 1977 law as a basis for its sweeping trade measures.

President Trump swiftly reacted to the decision, calling the appeals court "highly partisan" and the ruling a "total disaster for the Country" on his Truth Social platform. He asserted that, > "ALL TARIFFS ARE STILL IN EFFECT!" and vowed to take the fight to the Supreme Court, expressing confidence that the United States would "win in the end" with the high court's assistance.

Since returning to the presidency in January, President Trump has invoked IEEPA to impose "reciprocal" tariffs, including a 10% baseline on almost all U.S. trading partners and higher rates for dozens of economies. The ruling also affects tariffs imposed on Canada, Mexico, and China, which were linked to efforts to combat drug trafficking. This legal challenge does not, however, impact sector-specific tariffs imposed under other authorities, such as those on steel and aluminum.

The decision could cast doubt on trade deals President Trump has struck with major partners like the European Union and potentially lead to demands for billions of dollars in refunds for collected tariffs. Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent had warned the court that ruling the tariffs illegal would threaten U.S. strategic interests and cause "dangerous diplomatic embarrassment." If ultimately struck down, estimates suggest nearly $159 billion in collected tariffs could be subject to reimbursement.

The temporary stay until October 14 sets the stage for a likely appeal to the U.S. Supreme Court, which will determine the final legality of these tariffs. Legal experts suggest the Supreme Court, despite its conservative majority, has previously shown skepticism towards broad presidential expansions of power based on tenuous legislative grounds. The outcome will significantly shape the balance of power between the executive and legislative branches regarding trade policy.