A federal appeals court in the United States has ruled that President Donald Trump’s sweeping global tariffs, implemented under his administration’s flagship trade strategy, are not lawful. The ruling, delivered on 29 August 2025, marks the second major judicial rebuke of Trump’s efforts to unilaterally reshape US economic relations with the world through emergency trade powers, and it poses serious questions about the future of his controversial tariff policy.

Court Strikes Down Trump’s Tariffs, Stays Ruling

The US Court of Appeals for the Federal Circuit determined by a 7-4 margin that President Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose wide-ranging “reciprocal” tariffs on imports from nearly all major trading partners was a violation of his constitutional authority. The court declared that the power to levy tariffs or taxes remains exclusively with Congress, and that the IEEPA does not provide the president with unlimited authority to impose such sweeping import charges.

Although the court found that Trump overstepped his powers, it refrained from suspending the tariffs immediately. Instead, the judges have delayed enforcement of the ruling until 14 October 2025. This gives the Trump administration time to petition the Supreme Court, meaning the contested tariffs stay in effect for now. President Trump responded forcefully, calling the court’s decision “highly partisan” and insisting on social media that tariffs must remain for the sake of the country’s economic strength. The White House echoed his message, saying it expects “an ultimate victory” on appeal.

Background and Legal Arguments

Since taking office for his second term in January 2025, President Trump has continued to rely heavily on tariffs as a core element of his economic policy—reviving trade disputes with China, the European Union, Canada, Mexico, and others. The administration claimed its use of the IEEPA was necessary to address national security threats such as massive trade deficits, foreign fentanyl trafficking, and alleged unfair trading practices. However, several legal challenges argued such broad presidential action contradicts the US Constitution, which assigns the power to set tariffs to Congress alone.

In its ruling, the court stated that while the IEEPA allows the president to respond to genuine national emergencies, it does not explicitly authorise tariffs, duties, or taxes. The judges emphasised that Congress has a long and clear history of controlling tariff policy, and their opinion warned against letting any president override this legislative role.

This case consolidated lawsuits from twelve states and a group of small businesses. Their attorneys hailed the decision as a victory for the Constitution, stating that it reaffirmed Congress’s authority and limited the reach of presidential emergency powers. Meanwhile, the dissenting judges said the law’s language was broad enough to cover extraordinary actions in response to new kinds of international emergencies.

Economic and Diplomatic Impact

The practical and political stakes of the judgement are significant. Trump’s tariffs, which recently affected goods ranging from industrial equipment to everyday consumer products, were central to his approach for renegotiating agreements and pressurising global partners. Allies like Japan, the United Kingdom, and the European Union have often complained these tactics damaged trade relationships and increased business uncertainty. The ruling does not cover all tariffs, leaving some still in place under other laws, including those on steel, aluminium, automobiles, and sector-specific measures.

If the Supreme Court ultimately upholds the appeals court’s judgement, it could force the US government to refund billions collected in tariffs, fundamentally weaken Trump’s “America First” trade model, and transfer the power over such economic tools fully back to Congress. Legal and trade experts also note the decision could embolden other countries to resist future US tariff threats and delay the implementation of previously agreed trade deals.

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