A federal appeals court ruled Friday that President Donald Trump had no legal authority to impose sweeping tariffs under emergency powers law, dealing a major setback to his efforts to reshape global trade on his own terms.
The U.S. Court of Appeals for the Federal Circuit, in a 7-4 decision, said Trump’s reliance on the 1977 International Emergency Economic Powers Act (IEEPA) to declare national emergencies and levy import taxes on nearly every U.S. trading partner exceeded his authority.
U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., on April 2, 2025.
U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., on April 2, 2025.
Associated Press
But the court stopped short of striking the tariffs immediately, giving the administration time to appeal to the Supreme Court. The ruling will not take effect until October 14 as the Trump administration is widely expected to appeal the case to the highest court.
Trump signaled a Supreme Court appeal in a Truth Social post after the ruling, saying in part, “ALL TARIFFS ARE STILL IN EFFECT! 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. If these Tariffs ever went away, it would be a total disaster for the Country. It would make us financially weak, and we have to be strong. Now, with the help of the United States Supreme Court, we will use them to the benefit of our Nation, and Make America Rich, Strong, and Powerful Again! Thank you for your attention to this matter.”
Why It Matters
The decision complicates Trump’s ambition to fully upend decades of U.S. trade policy. He has other legal tools at his disposal, such as provisions in the 1974 Trade Act, but those authorities are narrower and limit how quickly and severely a president can act. Trump’s tariff policy — rolled out with little predictability — has rattled global markets, strained ties with U.S. allies and trading partners, and fueled concerns of higher consumer prices and slower economic growth.
At the same time, the levies have been central to Trump’s trade strategy. He has used them to pressure the European Union, Japan and others into what he touts as favorable trade deals, while boasting that tariffs have funneled tens of billions of dollars into the U.S. Treasury to offset the sweeping tax cuts he signed into law on July 4.
What To Know
The ruling largely upheld a May decision by the U.S. Court of International Trade in New York that found Trump’s use of IEEPA to justify tariffs “exceed any authority granted to the President.” That court had combined challenges from businesses and states that argued Trump’s tariffs were unconstitutional and economically harmful. While agreeing with that assessment, the appeals court allowed the levies to remain in place for now.
The government could also face financial consequences. If the tariffs are ultimately overturned, it may be required to refund some of the import taxes already collected — a potentially heavy hit to federal revenue.
Revenue from tariffs totaled $142 billion by July, more than double the amount at the same point last year. The Justice Department argued in court filings this month that eliminating the levies could lead to “financial ruin” for the United States.
The case focused on two major tariff actions tied to emergency declarations. The first came on April 2, which Trump dubbed “Liberation Day,” when he imposed “reciprocal” tariffs of up to 50% on countries running trade surpluses with the United States, along with a 10% “baseline” tariff on most other imports. Trump declared the decades-long trade deficit itself to be a national emergency. In August, he adjusted the rates but continued applying taxes even to imports from countries with which the U.S. runs surpluses.
The second set of levies, announced Feb. 1, targeted imports from Canada, China and Mexico. Trump called these “trafficking tariffs,” justifying them as a response to drugs and migrants crossing into the United States, which he declared a separate national emergency.
The Constitution grants Congress the power to levy taxes, including tariffs, though over time lawmakers have delegated significant trade authority to the president. Trump argued IEEPA provided virtually unlimited power to tax imports when national emergencies are declared. But no president had previously used the law to justify tariffs; it had been employed instead for sanctions and export restrictions against adversaries such as Iran and North Korea.
The challenges did not cover all of Trump’s trade actions. Tariffs he imposed under other legal authorities, such as those on steel, aluminum and automobiles after Commerce Department investigations, remain untouched. Nor does the ruling effect tariffs Trump first levied against China in his first term, which President Joe Biden later kept in place, citing unfair trade practices by Beijing.
In their dissent, judges who opposed Friday’s ruling said the 1977 emergency powers law “is not an unconstitutional delegation of legislative authority under the Supreme Court’s decisions,” arguing that Congress has previously granted presidents limited authority to impose tariffs.
What People Are Saying
Carl Tobias, Williams Chair in Law at the University of Richmond’s School of Law, told Newsweek in a statement, “The Federal Circuit basically affirmed the CIT ruling that the IEEPA does not authorize most of Trump’s tariffs, because Congress intended that it cover true national emergencies like the Iran Hostage crisis. The Court did stay its decision, so that Trump could appeal to SCOTUS, which seems likely to accept the case. Thus, the tariffs may apply until SCOTUS has heard the appeal, which might not be this year, unless it expedites review. These phenomena mean that uncertainty regarding tariffs may prevail for some time.”
Trump’s Truth Social post added, “The U.S.A. will no longer tolerate enormous Trade Deficits and unfair Tariffs and Non Tariff Trade Barriers imposed by other Countries, friend or foe, that undermine our Manufacturers, Farmers, and everyone else. If allowed to stand, this Decision would literally destroy the United States of America.
He continued, “At the start of this Labor Day weekend, we should all remember that TARIFFS are the best tool to help our Workers, and support Companies that produce great MADE IN AMERICA products. For many years, Tariffs were allowed to be used against us by our uncaring and unwise Politicians.”
Friday’s ruling said, “It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs. The statute neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the President’s power to impose tariffs.”
Jeffrey Schwab, director of litigation at the Liberty Justice Center, said the ruling shows Trump doesn’t have unlimited power to impose tariffs on his own: “This decision protects American businesses and consumers from the uncertainty and harm caused by these unlawful tariffs.”
What Happens Next
The ruling raises questions about Trump’s go-it-alone trade strategy. The president could fall back on Section 122 of the Trade Act of 1974, which permits tariffs of up to 15% for 150 days on imports from countries with large trade surpluses, or Section 301 of the same law, which allows tariffs in response to unfair trade practices. Trump used Section 301 authority in his first-term trade war with China.
Update: 8/29/25, 6:12 p.m. ET: This article was updated with new information and remarks.
Update: 8/29/25, 6:26 p.m. ET: This article was updated with new information and remarks. The headline was updated following President Trump’s remarks.
Update: 8/29/25, 6:38 p.m. ET: This article was updated with new information and remarks.
Update: 8/29/25, 7:49 p.m. ET: This article was updated with new information and remarks.
This article includes reporting by the Associated Press.