Implications of Court Ruling on Trump's Tariffs

Tue Sep 23 2025 10:44:36 GMT+0300 (Eastern European Summer Time)

A recent federal appeals court ruling declared that Donald Trump's tariffs are illegal, marking a significant shift in US trade policy and its implications for the economy and international relations. As the case moves towards the Supreme Court, potential outcomes remain uncertain.

The US Court of Appeals ruled that most of Donald Trump's tariffs, deemed an overreach of presidential power, will remain in place until mid-October. This decision followed a lower court ruling, declaring that Trump lacked the authority under the International Emergency Economic Powers Act to impose global tariffs. While the ruling is set to challenge Trump's key trade policies, it raises questions about economic stability and the potential effects on legislative authority regarding tariffs.

Implications of Court Ruling on Trump's Tariffs

A federal appeals court has ruled that most of Donald Trump's tariffs are an overreach of his use of emergency powers as president.

The so-called reciprocal tariffs, imposed on nearly every country the US trades with, are deemed illegally imposed, according to the US Court of Appeals. The decision upholds a previous ruling from the Court of International Trade, which rejected Trump's argument that his global tariffs were justified under an emergency economic powers act.

The tariffs stem from an announcement made in April establishing a flat 10% rate on imports to level what Trump described as unfair trade relations. While the court has not halted these tariffs, they will remain in place until mid-October, creating a pathway for further legal challenges in the US Supreme Court.

What did the appeals court say?

In its 7-4 decision, the appellate court affirmed that Trump did not possess the authority to impose global tariffs. This was primarily due to the law invoked by Trump, the International Emergency Economic Powers Act (IEEPA), which judges concluded did not authorize tariff imposition or taxation.

This ruling was met with immediate criticism from Trump, who labeled the court as highly partisan and claimed the decision could literally destroy the United States of America.

What is the IEEPA?

The decades-old act grants US presidents substantial authority to respond to national emergencies or threats from abroad. While historically used to impose sanctions, the appeals court clarified that the IEEPA does not grant presidents broad powers to levy tariffs.

Why is this important?

The appeals court ruling represents a significant setback for Trump's agenda, potentially affecting both the US economy and global markets. Tariffs act as taxes for companies importing foreign goods, which can impact sales and profit margins. This uncertain environment may cause international businesses to hesitate in conducting trade with the US.

What happens next?

The case is likely to advance to the Supreme Court for further deliberation. Trump has indicated his intention to continue fighting the ruling, stating he plans to utilize tariffs for national benefit.

What if the tariffs are deemed illegal?

If the Supreme Court affirms the decision, it could lead to uncertainty in financial markets. There are concerns regarding potential reimbursements of billions collected via import taxes, and significant implications for international trade agreements.

Are there still tariffs in place?

This ruling affects Trump's reciprocal tariffs but leaves separate tariffs on steel, aluminum, and copper intact. These tariffs will remain enforced until mid-October, after which they may no longer be valid if the Supreme Court does not intervene.