US Appeals Court Rules Key Trump Tariffs Illegal, Forcing Legal Pivot

A federal appeals court has struck down core tariffs imposed by former President Donald Trump. The ruling on Friday found Trump overstepped his legal authority using emergency powers. This decision deals a significant legal blow to his trade policy legacy.

The court allowed the tariffs to remain in place for now. This gives Trump’s legal team time to appeal the decision to the Supreme Court.

Legal Basis for the Tariff Ruling

The case centered on sweeping tariffs Trump placed on nearly all US trading partners. This included levies on China, Mexico, and Canada. Trump justified these actions by declaring longstanding US trade deficits a “national emergency.”

He invoked the 1977 International Emergency Economic Powers Act for authority. According to Reuters, the administration argued this law granted the president broad power. The court, however, strongly disagreed with this interpretation.

The ruling largely upheld a May decision from a specialized trade court in New York. That court stated the tariffs “exceed any authority granted to the President.”

Implications for Trade Policy and the Economy

This ruling challenges the foundation of Trump’s aggressive trade strategy. His tariffs have been a major point of contention. They rocked financial markets and created significant uncertainty for businesses.

Revenue from these tariffs totalled $159 billion by July. Striking them down could force the US Treasury to refund billions in collected duties. The Justice Department had warned this could cause financial harm.

The decision may also weaken the US’s negotiating position with other nations. Foreign governments could resist future demands or seek to renegotiate existing terms.

Next Steps and Alternative Paths

Trump has vowed to appeal the ruling to the Supreme Court. He called the decision one that would “destroy the United States of America.”

Legal experts note the administration has other, more limited tools. The Trade Act of 1974 allows for tariffs but restricts them to 15% for 150 days. Another statute, Section 232, requires a Commerce Department investigation first.

These alternatives lack the speed and severity of the emergency powers act. According to analysts, the administration was likely preparing for this outcome and has a “Plan B” ready.

This ruling fundamentally challenges a president’s power to unilaterally reshape trade policy. The future of the trump tariffs now rests with the nation’s highest court, setting up a monumental legal battle over executive authority.

Info at your fingertips

Q1: Which specific tariffs were ruled illegal?

The ruling targets tariffs Trump imposed on almost all US trading partners. This includes levies placed on China, Mexico, and Canada under the declared national emergency.

Q2: Are the tariffs still in effect right now?

Yes. The court suspended its ruling to allow for an appeal. The tariffs will remain in place until the Supreme Court makes a final decision on the case.

Q3: What was the main legal reason for overturning the tariffs?

The court found Trump overstepped his authority under the 1977 International Emergency Economic Powers Act. It ruled that trade deficits do not constitute a national emergency justifying such sweeping action.

Q4: How could this decision impact the US economy?

If the tariffs are ultimately removed, it could lead to lower prices on imported goods. It also removes a tool the administration used to pressure other countries in trade negotiations.

Q5: What happens if the Supreme Court agrees with this ruling?

The administration would have to drop the tariffs enacted under this specific law. It may also have to refund billions of dollars already collected from importers, impacting federal revenue.

Trusted Sources: Associated Press, Reuters