The debate over presidential power and America’s approach to trade policy erupted anew this week after a landmark federal appeals court ruling declared most of former President Donald Trump’s sweeping global tariffs illegal. The decision, handed down on August 29, 2025, by the U.S. Court of Appeals for the Federal Circuit, has set the stage for what many expect to be a high-stakes Supreme Court showdown, with potentially far-reaching consequences for the future of economic policy and the constitutional balance of power.
The tariffs in question, first imposed by Trump during his presidency, targeted imports from nearly every major U.S. trading partner—including China, Canada, and Mexico. Trump invoked the International Emergency Economic Powers Act (IEEPA) of 1977, declaring national emergencies over issues such as trade deficits and drug trafficking to justify the levies. Some of these tariffs began at a baseline 10%, but others soared as high as 104%, affecting goods ranging from food staples and apparel to cars and appliances, according to reporting from Business Insider and The Fulcrum.
However, the appeals court’s 7-4 decision was unambiguous: the IEEPA does not give the president the authority to impose tariffs. In the majority opinion, the court wrote, “The statute neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the President’s power to impose tariffs.” The court further emphasized that the power to set tariffs is a core legislative responsibility: “The core Congressional power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution.”
For Trump, the ruling was a direct challenge not only to his trade legacy but also to the broader notion of executive authority. He lashed out at the decision, calling the court “Highly Partisan” and warning, “If allowed to stand, this Decision would literally destroy the United States of America.” Trump doubled down on his belief in the economic and political necessity of tariffs, stating on Truth Social, “Now, with the help of the United States Supreme Court, we will use [tariffs] to the benefit of our Nation, and Make America Rich, Strong, and Powerful Again!”
The White House, through spokesperson Kush Desai, maintained that the tariffs remain in effect for now and expressed confidence in an eventual victory: “President Trump lawfully exercised the tariff powers granted to him by Congress to defend our national and economic security from foreign threats.”
But for many legal experts and small business owners, the court’s decision was a welcome affirmation of the constitutional order. Neal Katyal, former Acting Solicitor General and co-counsel for the Liberty Justice Center, which represented several small-business plaintiffs, said in a statement reported by Business Insider: “If he thinks these tariffs are so important, then he should go to Congress and get them approved.” Katyal added, “The decision today is a powerful reaffirmation of our nation’s core constitutional commitments from our nation’s Founders, especially the principle that Presidents must act within the rule of law.”
The case, known as V.O.S. Selections v. Trump, was consolidated from lawsuits brought by a dozen states and several small businesses, including VOS Selections, an importer of wine and spirits. Victor Schwartz, the company’s owner, told Business Insider that the tariffs had already resulted in layoffs and operational cutbacks. “We are going into our busiest time of the year, like many small businesses going into the holiday season, which means we’re shipping the most now,” Schwartz said. “That means we’re going to be paying the most, so the biggest burden of the tariffs is just upcoming, and that means that burden’s going to be passed on.”
The legal battle over the tariffs is not new. This is the second time courts have found that Trump overstepped his executive authority in imposing such sweeping trade measures. The appellate court’s ruling overturned a lower court injunction that had blocked the tariffs, but it paused the effect of its own decision until October 14, 2025. This gives both sides time to petition the Supreme Court for review—a move both Trump and his legal team have vowed to pursue.
For the administration’s defenders, the stakes are more than economic. Commerce Secretary Howard Lutnick warned in a declaration to the court that striking down the tariffs would “cause massive and irreparable harm to the United States and its foreign policy and national security both now and in the future.” Lutnick also cautioned that removing the tariffs could “threaten broader U.S. strategic interests at home and abroad, likely lead to retaliation and the unwinding of agreed-upon deals by foreign-trading partners, and derail critical ongoing negotiations with foreign-trading partners.”
Yet critics counter that Trump’s approach has created uncertainty for businesses and consumers alike. Supply chain experts and economists told Business Insider that the so-called “Liberation Day” tariffs have driven up prices for everyday goods and disrupted established supply chains. Ashley Akers, a former Department of Justice trial lawyer, noted, “While existing trade deals may not automatically unravel, the administration could lose a pillar of its negotiating strategy.”
Legal scholars have long argued that tariffs are not a “presidential plaything.” Instead, they are a core component of congressional authority, and bypassing legislative oversight—especially by invoking emergency statutes—undermines the checks and balances at the heart of American democracy. The court’s majority opinion echoed this sentiment, stating that both the “Trafficking Tariffs” and “Reciprocal Tariffs” imposed by Trump were “unbounded in scope, amount, and duration.”
Not all tariffs are affected by this ruling. The court clarified that tariffs imposed under other laws, such as those justified by national security concerns (including steel and aluminum), remain intact. There are also ongoing Section 232 investigations into resources like copper and timber, which could provide alternative avenues for future tariff actions without congressional approval.
The financial implications of the ruling are substantial. The Justice Department has warned that invalidating the tariffs could force the U.S. Treasury to issue refunds amounting to billions of dollars. The Congressional Budget Office, cited by Trump’s trade negotiators, has argued that the tariffs could reduce U.S. deficits by $4 trillion over the next decade—a point the court acknowledged but ultimately found insufficient to override constitutional limits.
As the case moves toward a likely Supreme Court hearing, the country finds itself at a crossroads. Will the judiciary reaffirm Congress’s exclusive role in crafting trade policy, or will it grant the executive branch sweeping powers to tax and retaliate at will? The coming months promise not just legal arguments, but a national debate over the future of American governance and the meaning of economic power in a divided world.
For now, businesses, consumers, and policymakers alike are left waiting—and watching—as the fate of Trump’s tariffs, and the constitutional order itself, hangs in the balance.
