WASHINGTON (BN24) — A federal appeals court ruled Friday that President Donald Trump had no constitutional authority to impose sweeping tariffs under a national emergency declaration, but it stopped short of immediately striking them down, allowing the administration time to seek review from the U.S. Supreme Court.
The U.S. Court of Appeals for the Federal Circuit issued a 7-4 decision finding that Trump had overstepped his powers when he used the International Emergency Economic Powers Act (IEEPA) to impose broad import taxes on nearly every major U.S. trading partner. The ruling largely upheld a May decision by the U.S. Court of International Trade in New York, which said Trump’s actions exceeded presidential authority.
However, the appeals court overturned the lower court’s order that would have nullified the tariffs immediately, giving the administration until October 14 to appeal. The move preserves Trump’s ability to maintain one of his central economic tools — tariffs — while the case proceeds toward what could be a landmark ruling at the Supreme Court.
“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,” the ruling stated.
The decision strikes at the heart of Trump’s second-term trade strategy. Tariffs have been a pillar of his foreign and economic policy, used as leverage to pressure countries into revising trade deals and curbing exports to the United States. Supporters argue the measures brought concessions from countries like China and Mexico, while critics say they destabilized financial markets, alienated allies, and fueled inflationary pressures.
Trump reacted defiantly, vowing to appeal. “If allowed to stand, this decision would literally destroy the United States of America,” he wrote on his social media platform.
The tariffs in question were part of Trump’s so-called “reciprocal tariffs” introduced in April, and a separate set imposed in February against China, Canada, and Mexico over allegations they failed to curb illegal fentanyl shipments into the U.S. Both measures were justified under Trump’s emergency declarations, citing trade imbalances and threats to American manufacturing strength and national security.
The appeals court noted that Congress holds constitutional authority to impose taxes and tariffs, and any delegation of such power must be explicit and limited. “It seems unlikely that Congress intended, in enacting IEEPA, to grant the president unlimited authority to impose tariffs,” the court said.
The 1977 law had historically been used to freeze assets or impose sanctions on adversaries, not tariffs. Trump is the first president to invoke IEEPA as a legal basis for import taxes. His administration has argued that the statute’s language allowing presidents to “regulate” imports should be interpreted to include tariffs.
The case before the court was brought by five small U.S. businesses and a coalition of 12 Democratic-led states, both challenging the tariffs as unconstitutional. Other lawsuits, including one filed by California, are pending.
Although the ruling weakens Trump’s legal rationale, it preserves his ability to continue using tariffs until the Supreme Court decides whether to intervene. Economists said businesses will likely act as though the tariffs remain in force, given the court’s temporary stay.
Brian Jacobsen, chief economist at Annex Wealth Management, said the ruling “probably means the Trump administration will resort to other powers to impose temporary tariffs,” adding that markets will continue bracing for volatility.
The Treasury Department, the Office of the U.S. Trade Representative, and the Commerce Department did not immediately respond to requests for comment.
The appeals court’s decision does not affect tariffs imposed under other laws, including Trump’s steel and aluminum duties, which remain intact.
