In a significant legal setback for former President Donald Trump’s trade agenda, a federal appeals court ruled Friday that he overstepped his authority by imposing sweeping tariffs under an emergency powers statute.
The court, however, allowed the duties to remain in effect pending a likely appeal to the U.S. Supreme Court.
The U.S. Court of Appeals for the Federal Circuit ruled 7-4 to uphold a lower court’s finding that the use of the International Emergency Economic Powers Act of 1977 (IEEPA) to levy broad tariffs was invalid.
The law has historically been used to impose sanctions in response to national security threats, not to tax imports.
A group of judges wrote in the ruling, “The statute bestows significant authority on the President to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax… Absent a valid delegation by Congress, the President has no authority to impose taxes.”
The decision casts uncertainty over a cornerstone of Trump’s economic policy, which applied a 10% baseline tariff on imports from most countries and higher “reciprocal” tariffs on dozens of trading partners.
The appellate court issued a stay on its ruling until Oct. 14, 2025, to allow the administration time to appeal.
Following the decision, Trump posted on his social media platform, writing, “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.”
In his social media post, Trump said, “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.”
White House spokesman Kush Desai said in a statement that the tariffs remain in effect and the administration anticipates “ultimate victory on this matter.”
The Justice Department said it would appeal the decision.
The legal challenge was brought by a coalition of state governments and small businesses who argued the ongoing trade deficit did not constitute the type of national emergency required to invoke the IEEPA.
The ruling does not affect tariffs imposed under other trade laws, such as national security tariffs on steel and aluminum.
Legal experts noted that even if the Supreme Court upholds the ruling, the president retains other statutory authorities to impose tariffs, such as Section 301 of the Trade Act of 1974 or Section 232 of the Trade Expansion Act of 1962.