Appeals Court Rejects Trump’s Global Tariffs
Decision delivers blow to central prong of president’s economic agenda; levies will remain in place pending further proceedings
Updated Aug. 29, 2025 The Wall Street Journal
The ruling, a blow to Trump’s agenda, may go to the Supreme Court; tariffs remain until mid-October.
- A federal appeals court struck down Trump’s tariffs, stating he overstepped his power in rewriting trade policy.
A federal appeals court late Friday struck down the Trump administration’s signature tariffs, finding that the president had gone too far in his use of emergency powers to rewrite U.S. trade policy.
The 7-4 ruling from the U.S. Court of Appeals for the Federal Circuit upheld a lower-court decision that undercuts a core tenet of President Trump’s economic agenda. The majority found the president overstepped his authority under a 1977 law known as the International Emergency Economic Powers Act, or Ieepa.
The decision is a significant blow to one of the signature policies of Trump’s second term, and sets the stage for the case to go to the Supreme Court. The appeals court allowed the tariffs to remain in place through mid-October to allow the parties time to ask the high court to hear the case.
Trump railed against the decision in a post on Truth Social. “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,” he wrote.
Trump imposed the so-called reciprocal levies on virtually every U.S. trading partner in April in an event he labeled “Liberation Day,” setting off days of market chaos and uproar from foreign governments. That prompted Trump to pause many of the levies to allow for negotiations with dozens of foreign governments. Modified tariff rates were put into place in early August, though talks with many nations continue.
The reciprocal tariffs account for about 70% of projected tariff revenue in 2026, according to estimates from the Tax Foundation, though the administration is also planning to ramp up levies under other legal authorities unaffected by the Friday decision.
The levies voided by the decision include baseline tariffs of 10% on virtually all countries, as well as steeper tariffs on countries the administration considers bad actors on trade—and an additional set of tariffs on Canada, China and Mexico.
The decision, even if upheld by the Supreme Court, won’t cancel all of Trump’s second-term tariffs. Alongside the so-called reciprocal tariffs, Trump has also imposed a number of levies on industries including automobiles, steel, aluminum and copper under a separate national security authority. Those tariffs are unaffected by the ruling, and the administration plans to expand them over the next few months—in part to provide a backstop if the Ieepa tariffs are overturned.
In ruling against Trump, the appeals court majority, in an unsigned opinion, said Ieepa “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.” Nowhere in the statute does the term “tariff” or synonyms like “tax” and “duty” appear, the court observed.
When “Congress intends to delegate to the President the authority to impose tariffs, it does so explicitly,” the court said. “This is no surprise, as the core Congressional power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution.”
The court said the “unheralded” and “transformative” nature of the tariff policy triggered the major questions doctrine—a term the Supreme Court coined when striking down Biden administration policies, such as student debt relief, the justices saw as reaching far beyond the regulatory authority Congress had granted the executive branch.
The court didn’t break along partisan lines; judges appointed by presidents of both parties were on each side.
Dissenting judges said that Congress had cleared the way for sweeping actions like Trump’s worldwide tariff policies. “IEEPA embodies an eyes-open congressional grant of broad emergency authority in this foreign-affairs realm, which unsurprisingly extends beyond authorities available under non-emergency laws,” Judge Richard Taranto wrote for the dissenters.
The Trump administration said Ieepa gave the president the power to use tariffs broadly to regulate imports during a national emergency, invoking the trade deficit among other issues. It acknowledged, however, that no previous president had ever used Ieepa in a similar fashion.
In imposing other levies on Canada, China and Mexico, the administration argued the countries hadn’t done enough to prevent the trafficking of fentanyl across American borders.
Trump’s tariffs were quickly challenged in court by a coalition of Democratic-led states and small businesses that said the law didn’t give Trump the authority to impose the tariffs at all.
A three-judge panel from the Court of International Trade agreed and struck down the tariffs in May. That decision was put on hold while the administration appealed to the Federal Circuit. All 11 of the appeals court’s active judges heard the case.
Ahead of the decision, top lawyers for the Trump administration sent the appeals court a letter warning that ruling against the president would have “catastrophic consequences,” pointing to agreements reached with the European Union, Indonesia, the Philippines and Japan. Even if the court voided the tariffs, that decision should be put on hold, they said.
“Our country would not be able to pay back the trillions of dollars that other countries have already committed to pay, which could lead to financial ruin,” they wrote. “The President believes that a forced dissolution of the agreements could lead to a 1929-style result.”
The challengers celebrated the decision on Friday. “This ruling protects American businesses and consumers from the uncertainty and harm these unlawful tariffs have caused,” said Jeffrey Schwab, director of litigation for the Liberty Justice Center, which brought the case on behalf of a small wine importer.
Write to Louise Radnofsky at louise.radnofsky@wsj.com, Jess Bravin at Jess.Bravin@wsj.com and Gavin Bade at gavin.bade@wsj.com
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Appeared in the August 30, 2025, print edition as 'Appeals Court Nixes Tariffs'.
A federal appeals court struck down Trump’s tariffs, stating he overstepped his power in rewriting trade policy.
The court found Trump overstepped his authority under the International Emergency Economic Powers Act, a 1977 law.