A U.S. federal appeals court has dealt a dramatic blow to President Donald Trump’s sweeping global tariff program, ruling on August 29, 2025, that most of the tariffs imposed by the Trump administration are illegal. The decision, delivered by the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., challenges the very foundation of Trump’s trade strategy, which relied heavily on tariffs as a tool to reshape America’s economic relationships with the world.
The ruling stems from a series of lawsuits brought by small U.S. businesses and a coalition of 12 Democratic-led states. These groups argued that the International Emergency Economic Powers Act (IEEPA)—a law from 1977 typically used to impose sanctions or freeze assets during national emergencies—does not grant the president the authority to impose tariffs, duties, or taxes on imported goods. "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 court stated, as reported by Reuters.
The appeals court’s 7-4 decision affirmed a lower court’s ruling from May 2025, which found that Trump exceeded his authority in using IEEPA to levy broad tariffs. The judges emphasized that the language of IEEPA falls short of granting tariff powers, noting, "IEEPA’s grant of presidential authority to ‘regulate’ imports does not authorize the tariffs imposed by the Executive Orders." According to The New York Times, the court further explained, "Whatever the policy justifications may be, they cannot override Congress’s choice of statutory limits."
Despite the setback, the court delayed the implementation of its ruling until October 14, 2025. This pause allows the Trump administration to keep the tariffs in place while it appeals to the U.S. Supreme Court. The White House confirmed its intention to take the fight to the highest court, setting up a potentially historic legal showdown over the extent of presidential powers in economic policy.
President Trump, never one to shy away from controversy, lashed out at the decision on his Truth Social platform, calling the court "highly partisan" and doubling down on his belief in the necessity of tariffs. "If these Tariffs ever went away, it would be a total disaster for the Country," he wrote, insisting, "It would make us financially weak, and we have to be strong." Trump further declared, "Now, with the help of the United States Supreme Court, we will use them to the benefit of our Nation, and Make America Rich, Strong, and Powerful Again!"
The tariffs at the center of the legal battle were rolled out in a series of executive orders beginning in early 2025. On April 2, Trump announced sweeping "reciprocal tariffs"—a 10% baseline duty on nearly all imports into the United States, affecting more than 180 countries and territories (excluding countries like Russia, North Korea, Cuba, and Belarus, which were already under U.S. sanctions). Ukraine faced a 10% tariff, while China was hit the hardest with tariffs soaring to 145% by April 9, before a temporary truce in July reduced the rate to 30%. Other major trading partners, including the European Union and Mexico, faced a 30% tariff from August 1, while Japan and South Korea were slapped with 25%, Laos and Myanmar with 40%, Malaysia and Kazakhstan with 25%, and South Africa with 30%.
Trump also imposed a 25% tariff on imported automobiles and doubled duties on steel and aluminum to 50%. In addition, he announced sector-specific tariffs such as a 100% levy on foreign films and a 25% "fentanyl tariff" targeting countries—primarily China—accused of facilitating opioid flows into the U.S. The president justified these measures by declaring national emergencies related to trade deficits, declining U.S. manufacturing power, and the cross-border flow of drugs. As reported by APA citing Reuters, Trump argued that the persistent U.S. trade deficit was undermining the nation’s manufacturing capability and military readiness, and that countries like China, Canada, and Mexico were not doing enough to stop illegal fentanyl from crossing American borders—an assertion those countries have denied.
The legal challenge to Trump’s tariff program has been building for months. The New York-based U.S. Court of International Trade first ruled against Trump’s tariffs on May 28, 2025, finding he had exceeded his authority. The Federal Circuit’s ruling now affirms that decision. Notably, the Supreme Court—which currently has a 6-3 conservative majority—has sometimes favored Trump’s agenda but has also shown skepticism toward expansive interpretations of old statutes to grant presidents new powers.
The Trump administration’s legal team, led by the Department of Justice, contends that IEEPA’s emergency provisions do allow the president to "regulate" imports, which they argue includes the power to block or tariff goods. However, the appeals court made clear that the Constitution grants Congress—not the president—the authority to issue taxes and tariffs, and any delegation of that authority must be explicit and limited.
This ruling does not affect tariffs that were imposed under other legal authorities, such as those on steel and aluminum. But the decision casts a shadow over Trump’s broader trade war strategy, which has been a cornerstone of his second-term foreign policy. Trump’s tariffs have been used to exert political pressure on trading partners and extract economic concessions, but they’ve also increased volatility in global financial markets. As Art Hogan, chief market strategist at B. Riley Wealth, told Reuters, "The last thing the market or corporate America needs is more uncertainty on trade."
William Reinsch, a former senior Commerce Department official now with the Center on Strategic and International Studies, noted that the Trump administration had been bracing for this outcome. "It’s common knowledge the administration has been anticipating this outcome and is preparing a Plan B, presumably to keep the tariffs in place via other statutes."
Political reactions to the ruling have been predictably divided. Critics argue that Trump’s aggressive use of tariffs has hurt American businesses and consumers by raising prices and provoking retaliatory measures from key allies and trading partners. Supporters, on the other hand, maintain that strong trade barriers are necessary to protect U.S. industry, reduce dependency on foreign goods, and address long-standing trade imbalances. The legal battle over tariffs now joins another high-stakes fight over the independence of the Federal Reserve, as Trump seeks to remove Governor Lisa Cook, further raising the stakes for the president’s economic agenda.
With the Supreme Court likely to weigh in soon, the fate of Trump’s tariffs—and perhaps the future scope of presidential economic power—hangs in the balance. For now, the tariffs remain in effect, but the coming months promise a legal and political drama that could reshape the rules of global trade for years to come.
