Trump Tariffs Deemed Mostly Illegal by Federal Court in Major Blow to Trade Policy

Donald Trump has suffered a significant defeat to his tariff-driven trade strategy, as a US federal appeals court in Washington DC ruled that the majority of his wide-ranging tariffs were imposed without proper legal authority. The judgement, passed by a margin of 7-4, marks the most stinging rebuke yet for the former president’s efforts to upend global trade through the dramatic escalation of tariffs.

The court asserted that while American law grants substantial powers to the president during a declared national emergency, these powers do not explicitly extend to the ability to levy tariffs, duties or similar taxes. The ruling criticised Trump’s tariffs as being “unbounded in scope, amount and duration,” highlighting that the laws his administration relied upon offer no clear or direct delegation of such powers.

Trump’s so-called “liberation day” tariffs, which set a 10 percent baseline charge across almost all US trading partners, as well as his reciprocal tariffs targeting countries accused of unfair practices, were specifically declared unlawful. The appeals court concluded that the statutes cited by the administration, especially the International Emergency Economic Powers Act (IEEPA), do not mention tariffs or provide procedural safeguards typically accompanying such authority.

Small businesses in the US mounted legal challenges, arguing that the tariffs harmed domestic enterprises across the country. During court hearings, judges strongly questioned the legal foundation for such sweeping use of executive power to alter US trade policy so extensively. “It seems unlikely that Congress intended in enacting IEEPA to grant the president unlimited authority to impose tariffs,” the court summarised.

Despite the ruling, which will not take effect until 14 October, Trump insisted via social media that all tariffs remain in place. He accused the court of political bias, vowing to defend the tariffs as essential to supporting American workers and manufacturers. The Biden administration is expected to ask the Supreme Court to review and potentially resolve the constitutional questions raised by the ruling.

Markets and policymakers alike are watching closely, as the future of American trade policy hangs in the balance pending further legal appeals. For now, the ruling stands as a landmark clarification of limits on presidential power in economic matters, with implications for both US industry and its trading partners.