U.S. Appeals Court Deals Major Blow to Trump’s Tariff Strategy

 

U.S. President Donald Trump holds a chart next to U.S. Secretary of Commerce Howard Lutnick at the White House in Washington on April 2.

A federal appeals court has ruled that most of former President Donald Trump’s sweeping tariffs are illegal, striking at the heart of one of his signature economic policies. In a 7-4 decision, the U.S. Court of Appeals for the Federal Circuit found that Trump overstepped his authority under the 1977 International Emergency Economic Powers Act (IEEPA) when he imposed broad “reciprocal” tariffs on numerous countries, as well as targeted levies against China, Canada, and Mexico.

The court determined that IEEPA does not grant the president the power to impose tariffs, a responsibility the Constitution assigns to Congress. While the ruling invalidates the legal basis for the measures, the judges allowed the tariffs to remain in place until October 14 to give the Trump administration time to appeal to the Supreme Court.

Trump had justified the tariffs as necessary to address trade imbalances, protect U.S. manufacturing, and curb the flow of illegal drugs across borders. Critics, including small businesses and a coalition of Democratic-led states, argued that the move was an unprecedented and unlawful expansion of presidential power.

If upheld, the decision could force the government to refund billions in collected duties and significantly weaken the administration’s leverage in trade negotiations.