Former US President Donald Trump, who made tariffs a cornerstone of his trade strategy, has suffered a major legal setback. Trump had long argued that he could bypass Congress and unilaterally impose heavy tariffs on imports by invoking national emergency powers. However, a US Federal Circuit Appeals Court has now ruled that Trump exceeded his authority, dealing a blow to his aggressive tariff policies.
The court emphasized that under the US Constitution, the power to impose tariffs rests with Congress. While lawmakers over time have delegated some flexibility to the President, the judges noted that Trump had gone far beyond those limits when he levied sweeping tariffs on multiple countries by declaring a national emergency. The ruling largely upholds a May verdict by the US International Trade Court in New York, which had also called Trump’s tariff measures unlawful.
Why this is a big blow to Trump
The decision is a significant setback for Trump, whose unpredictable trade moves unsettled global markets, disrupted businesses, pushed prices upward, and raised fears of slower economic growth. The ruling directly questions the legality of tariffs he imposed in April on nearly all major US trading partners.
The administration’s defense
Trump’s team argued that past presidents, including Richard Nixon, used emergency powers to impose tariffs—pointing to Nixon’s economic measures during the 1970s crisis when he ended the dollar’s link to gold. The court, however, countered that Trump’s blanket tariffs had no such precedent. Judges noted that the 1977 International Emergency Economic Powers Act (IEEPA), which Trump relied upon, was never intended to grant such sweeping tariff powers.
Financial stakes for the US
Some judges expressed concern over the consequences of striking down Trump’s tariffs. Government lawyers warned that rolling them back could force Washington to refund billions already collected. In July alone, tariff revenue stood at $159 billion, nearly double the previous year. Officials also cautioned that reversing Trump’s measures might trigger financial instability and limit future presidential leverage on trade.
Trump’s justification
Trump repeatedly described America’s longstanding trade deficit as a “national emergency” and claimed his tariffs were essential for protecting US interests. He initially suspended them for 90 days to allow space for negotiations, but when countries like India, Algeria, and Laos refused to yield, he slapped them with steep duties—50%, 30%, and 40% respectively. While allies like the UK, Japan, and the European Union struck deals, many others resisted.
The road ahead
The ruling underscores a broader constitutional debate: how far presidential powers can stretch when it comes to trade. For Trump, it raises fresh political and legal questions as he campaigns to reclaim the presidency. If his tariffs are eventually rolled back, it could not only dent his economic narrative but also complicate future White House efforts to use trade as a political weapon.
