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A federal appeals court on Friday ruled that President Donald Trump had no legal authority to impose sweeping tariffs on nearly every country in the world, dealing a major legal setback to one of his signature economic policies but leaving the duties in place for now.
The U.S. Court of Appeals for the Federal Circuit, in a 7-4 ruling, said Trump overstepped his powers under the International Emergency Economic Powers Act (IEEPA), a 1977 law that allows presidents to act during national emergencies. The decision largely upheld a May ruling by the U.S. Court of International Trade in New York.
“It seems unlikely that Congress intended to … grant the President unlimited authority to impose tariffs,” the majority wrote.
The judges delayed striking down the tariffs to give Trump’s administration until mid-October to appeal to the Supreme Court.
Trump vows to fight on
Trump immediately blasted the decision on his social media platform.
“If allowed to stand, this Decision would literally destroy the United States of America,” he wrote.
White House spokesman Kush Desai insisted Trump acted lawfully, adding, “We look forward to ultimate victory on this matter.” Attorney General Pam Bondi accused the court of interfering in foreign policy and vowed to appeal.
Small businesses, allies react
The ruling was welcomed by critics who said Trump’s expansive tariff claims were unlawful.
“This decision protects American businesses and consumers from the uncertainty and harm caused by these unlawful tariffs,” said Jeffrey Schwab, litigation director at the Liberty Justice Center, which represents small firms hurt by higher import costs.
But Jake Colvin, president of the National Foreign Trade Council, cautioned that “it remains unclear whether businesses will see any immediate effects.” If the tariffs are ultimately overturned, he added, “Congress must reclaim its constitutional mandate to regulate duties and bring long-term certainty.”
Sen. Ron Wyden, D-Ore., said he would push votes on repealing what he called “harmful, regressive taxes” at every opportunity.
Billions at stake
Since their rollout in 2023, Trump’s tariffs have raised $159 billion for the Treasury, more than double the amount from the prior year. The Justice Department has warned that if struck down, the government may face billions in refund requests — a scenario it called potential “financial ruin.”
Trump relied on IEEPA to justify two major sets of tariffs:
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“Liberation Day” tariffs announced April 2, imposing a 10% “baseline” duty on most imports and up to 50% on countries with trade surpluses against the U.S.
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“Trafficking tariffs” announced Feb. 1 targeting Canada, China and Mexico, justified as an emergency response to drug and migrant flows.
No president before Trump had invoked IEEPA to impose tariffs, though it has often been used for sanctions on adversaries like Iran and North Korea.
Legal battle ahead
Friday’s ruling complicates Trump’s strategy of using tariffs as a pressure tool in trade negotiations. Allies including the European Union and Japan have bristled at the levies, while global markets have been rattled by their unpredictable rollout.
Still, the dissenting judges left a legal opening, writing that IEEPA “is not an unconstitutional delegation of legislative authority” under Supreme Court precedent. Trump could also turn to narrower tariff powers under the Trade Act of 1974, though those limit both the size and duration of import taxes.
Ashley Akers, a former Justice Department trial lawyer now at Holland & Knight, said the ruling “could strip the administration of a central negotiating pillar.”
For now, the tariffs remain in place — but with the courts questioning their foundation, their long-term future may rest with the Supreme Court.
