President Donald Trump’s cornerstone economic policy was dealt another setback Friday when a federal appeals court ruled he did not have the authority to impose most of his sweeping tariffs on imports from dozens of trading partners.
Appeals court strikes down Trump’s tariffs as illegal but leaves them in place
Trump’s cornerstone economic policy faced yet another challenge as a federal appeals court ruled he did not have the authority to impose them.
August 29, 2025 The Washington Post
The U.S. Court of Appeals for the Federal Circuit upheld a lower court’s decision that Trump overstepped his authority in using a 1977 law, called the International Emergency Economic Powers Act, or IEEPA, to impose most of his tariffs. The emergency law is used in the case of threats against the country.
“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,” a group of federal judges wrote in their ruling.
The decision throws the future of Trump’s foundational economic policy into uncertainty once more, just weeks after the president announced increased levies on more than 60 countries around the world. Those tariffs spared many countries from even higher levels first proposed by Trump in April, but still added much higher taxes than the country has imposed in recent decades.
Trump posted on Truth Social Friday criticizing the decision, writing that 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.”
The legal challenge was brought by a group of state governments and small businesses, who argued, in part, that no such emergency exists to justify Trump using the law. The Trump administration has disputed this, pointing to an executive order Trump signed earlier this year declaring the trade deficit a national emergency.
The Justice Department is expected to appeal the ruling to the Supreme Court, meaning the issue could drag on for months before a resolution is reached. Tariffs have been allowed to remain in effect in the meantime, despite a lower-court ruling them illegal, due to a stay while proceedings continue.
Trump’s tariff policy is based on his belief that the U.S., the world’s largest economy, has been taken advantage of by trading partners who operate in a trade deficit to the country. The president has pledged the levies will bring a “Golden Age” back to the country’s manufacturing.
But the tariffs have been controversial among economists and trading partners — tariffs are taxes that U.S. importers pay, and those costs are often passed on to the businesses and consumers who buy the goods. As a result, many view such tariffs as taxes on end users.
The U.S. economy is already starting to feel the effects of the policies, with a weaker than expected labor market revealed last week and consumers pull back on spending — as companies and Americans evaluate the uncertainty of the policies.
During a slight reprieve from higher tariffs earlier this year, the Trump administration attempted to broker deals with countries around the world. By the time the higher tariffs kicked in on their self-imposed deadline, they had reached a handful of trade deals, agreeing to impose levies on imports from the European Union, Britain, Vietnam, Japan and others.
Those countries that did not agree to new trade terms were divided into three brackets: Countries where the U.S. enjoys a trade surplus will see their goods taxed at a 10 percent rate when landing on U.S. shores; merchandise from countries where the U.S. incurs a small trade deficit will be hit with a 15 percent tax; and products from all other countries will face extra customs fees running as high as 50 percent.
There are other legal avenues for the White House to pursue tariffs, including a law they used to start the levies on imports of steel, aluminum and automobiles. If Trump’s use of IEEPA is ultimately struck down in court, it’s possible he will explore other laws to impose tariffs.
@davidjlynch