WASHINGTON D.C. – In a significant decision impacting U.S. trade policy, a federal appeals court has declared the majority of tariffs imposed under former President Donald Trump's administration illegal due to a lack of statutory authority.
The U.S. Court of Appeals for the Federal Circuit, in a 7-4 ruling on August 29, 2025, affirmed a lower court's finding that the International Emergency Economic Powers Act (IEEPA) does not grant the president the authority to impose such broad tariffs. The court stated that it is unlikely Congress intended IEEPA to grant the president unlimited authority to impose tariffs, especially since the statute does not explicitly mention tariffs.
The ruling stems from lawsuits filed by small U.S. businesses and 12 Democratic-led states, which argued that the IEEPA does not authorize presidential tariffs and that the Constitution reserves tariff authority for Congress. The court echoed these arguments, noting that while IEEPA grants significant authority in emergencies, it does not explicitly include the power to impose tariffs or taxes.
Former President Trump criticized the ruling as "highly partisan" and expressed confidence that the U.S. Supreme Court would overturn it, warning that the removal of tariffs would be a "total disaster for the Country." The tariffs will remain in place until October 14, 2025, to allow the Trump administration time to appeal to the Supreme Court. This temporary measure acknowledges the potential economic disruption and provides a procedural pathway for further legal review.
The case highlights the ongoing tension between executive and legislative powers in shaping economic policy. Tariffs totaling $159 billion collected by July 2025 could potentially be subject to refunds. While this ruling specifically addresses tariffs imposed under IEEPA, other tariffs, such as those on steel and aluminum enacted under Section 232 of the Trade Expansion Act of 1962, are not directly affected by this particular decision. The legal battle is expected to continue, with the Supreme Court's eventual decision poised to set a significant precedent for presidential authority in international trade and economic matters.