Trump’s Sweeping Tariffs under IEEPA Invalidated by Appeals Court, Matter moves to Supreme Court

The decision is a big blow to President Trump’s trade policies, but the judges left the duties in place for now to allow time for a likely appeal to the Supreme Court.

Court Decision

· The U.S. Court of Appeals for the Federal Circuit ruled that many of President Trump’s tariffs were illegal, affirming a lower court’s finding that he lacked unlimited authority to impose duties under the International Emergency Economic Powers Act (IEEPA).

· Enforcement of the ruling is delayed until mid-October, allowing time for a likely Supreme Court appeal.

Legal Basis & Controversy

· Trump used IEEPA, a 1970s law typically reserved for sanctions, to justify broad tariffs on imports from countries like China, Canada, and Mexico.

· The court found that IEEPA does not grant tariff authority, and that Congress did not intend to give the president unbounded powers over trade.

· Legal experts and former advisers questioned the legitimacy of using IEEPA for tariffs, noting it bypasses Congressional oversight.

Political & Economic Reactions

· Trump criticized the ruling as partisan and warned of economic disaster if tariffs are removed.

· His administration argued that weakening tariff powers could disrupt trade deals and cause economic chaos.

· Plaintiffs, including small businesses and states, claimed financial harm from unauthorized tariffs.

Business & Trade Implications

· The ruling affects a wide range of tariffs, including reciprocal tariffs and duties imposed during Trump’s first term.

· Despite the setback, Trump retains other tariff tools:

o Section 232 (national security-based tariffs)

o Section 122 (temporary global tariffs)

o Section 301 (retaliation for unfair trade practices)

Broader Impact

· The decision challenges the executive branch’s reach in trade policy.

· It may prompt Congress to reassert its constitutional role in regulating duties.

· Relief for businesses remains uncertain until the Supreme Court rules.

[ABS News Service/30.08.2025]

A federal appeals court ruled on Friday that many of President Trump’s most punishing tariffs were illegal, delivering a major setback to Mr. Trump’s agenda that may severely undercut his primary source of leverage in an expanding global trade war.

The ruling, from the U.S. Court of Appeals for the Federal Circuit, affirmed a lower court’s initial finding in May that Mr. Trump did not possess unlimited authority to impose taxes on nearly all imports to the United States. But the appellate judges delayed the enforcement of their order until mid-October, allowing the tariffs to remain in place so that the administration can appeal the case to the Supreme Court.

The adverse ruling still cast doubt on the centerpiece of Mr. Trump’s trade strategy, which relies on a 1970s law to impose sweeping duties on dozens of the country’s trading partners. Mr. Trump has harnessed that law — the International Emergency Economic Powers Act, or IEEPA — to raise revenue and to pressure other countries into brokering favorable deals. The law has typically been reserved for sanctions and embargoes against other nations.

The loss proved especially stinging after the Trump administration told the court earlier on Friday that any weakening of its tariff powers could unleash economic chaos. Hours before the ruling, the president’s top economic advisers raised special concern about the fate of the trade agreements the United States had struck with other governments. Among the deals they cited was an agreement with the European Union, which made favorable concessions to escape even higher U.S. taxes on its goods.

The president, who has spent months insisting that his tariffs would make America “rich again,” has invoked the specter of the Great Depression if his ability to impose levies is curtailed and if the country is forced to pay back billions of dollars in tariff revenue.

In a social media post after the ruling on Friday, Mr. Trump blasted the court and its conclusions, and appeared to tee up a forthcoming appeal to the Supreme Court.

“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,” Mr. Trump wrote. “If these Tariffs ever went away, it would be a total disaster for the Country.”

The appeals court ruling implicates a vast set of tariffs, some of which date back to the beginning of Mr. Trump’s presidency. They include some of his toughest duties on China, Canada and Mexico, and his so-called reciprocal tariffs, which Mr. Trump later revised and began collecting this month.

To impose the duties, Mr. Trump leaned on IEEPA, a decades-old economic emergency law that does not even mention the word tariff. The president invoked its powers to combat what he described as a widening set of threats, from persistent trade deficits to the flow of fentanyl into the United States.

Without IEEPA, the president would be limited in the duties he could apply, and the manner and speed in which they could be imposed. Otherwise, he could seek to enact tariffs with the support of Congress.

The administration has no guarantee of success at the Supreme Court. Many leading conservative and libertarian lawyers and scholars have argued that the president’s duties were issued illegally.

Mr. Trump’s claims of seemingly unlimited trade power have elicited legal challenges from small businesses and states, which said they were harmed financially by taxes on foreign goods that the president had no right to issue. In May, a federal trade court agreed, invalidating many of the president’s duties on grounds that the law did not grant him “unbounded authority” to wage his global trade war.

The Trump administration quickly appealed, and the court at first allowed the president to maintain his tariffs while the judges considered the legality of Mr. Trump’s actions. In its 7-4 ruling, issued late Friday, a majority on the court determined for a second time that the breadth of the tariffs the president had imposed was illegal.

“It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the president unlimited authority to impose tariffs,” a majority of judges wrote in their ruling, citing the “magnitude” of the duties Mr. Trump had put in place.

Jeffrey Schwab, the director of litigation at the Liberty Justice Center, which represented small businesses that brought one of the lawsuits, said the decision underscored that the president “doesn’t have the authority under IEEPA that he claims he has.”

No president before Mr. Trump had invoked the economic emergency law to tax imports. During Mr. Trump’s first term, his own advisers raised questions about whether IEEPA, which is typically used to issue foreign sanctions, could be used to levy broad tariffs.

Upon his return to the White House, however, Mr. Trump and his advisers took a more expansive interpretation, concluding that an economic emergency could be declared in response to a wide variety of concerns, including the trade deficit. They came to see IEEPA as a tool that would enable them to “move quickly,” said Ted Murphy, an international trade expert at the law firm Sidley Austin.

“The president can do lots of things in the trade space,” he said. “The fundamental part of this decision is reminding everyone that the power to assess tariffs was bestowed by the Constitution to Congress.”

Even if Mr. Trump appeals to the Supreme Court and loses, he still retains significant tariff powers.

The available tools include a provision of trade law known as “Section 232,” which allows the president to impose duties related to national security. Mr. Trump has used this tool to impose duties on foreign cars and steel, and propose additional tariffs on semiconductors, pharmaceuticals and other products.

Other trade laws allow the president to issue more sweeping tariffs for a limited period of time. Section 122 of the Trade Act of 1974, for example, allows a president to impose duties of up to 15 percent globally for up to 150 days, and could be used as a temporary measure. Another provision of that law, known as Section 301, gives the president broad scope to issue tariffs in response to unfair trading practices, as long as the administration first carries out consultations and an investigation.

Jake Colvin, the president of the National Foreign Trade Council, which represents companies that do business internationally, said a decision to strike down tariffs should serve “as a wake up call for Congress to reclaim its constitutional mandate to regulate duties.” He called the court’s decision “positive,” but said it was still unclear whether businesses would see relief from the ruling.