An appeals court ruled 7-4 Friday evening that most of President Donald Trump’s tariffs, a series of which he imposed by executive order under emergency powers granted by The International Emergency Economic Powers Act, are unlawful.
The U.S. Court of Appeals for the Federal Circuit ruling comes hours after Trump administration officials including Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnik, and Secretary of State Marco Rubio filed statements calling on the court to stay any judgement against the administration until the matter can be decided by the Supreme Court.
The ruling could mean the U.S. government has to repay billions of dollars in already-collected tariffs and undoes a pillar of Trump’s foreign and economic policy.
Trump’s administration has touted the money collected by the IEEPA tariffs as one way — along with deep cuts to government employment and social services — to pay for the president’s other pet policy: his extremely expensive tax cuts and defense spending package passed by Congress in July.
The court allowed the tariffs to remain in place until October 14, giving the administration time to appeal to the high court.
The White House immediately suggested it would appeal.
“President Trump lawfully exercised the tariff powers granted to him by Congress to defend our national and economic security from foreign threats,” White House spokesperson Kush Desai said in an email. “The President’s tariffs remain in effect, and we look forward to ultimate victory on this matter.”
Trump himself railed against the court and its decision in a post on his social media platform, Truth Social.
“ALL TARIFFS ARE STILL IN EFFECT! Today a Highly Partisan Appeals Court incorrectly said that our Tariffs should be removed, but they know the United States of America will win in the end,” he wrote.
Trump’s tariffs had already been struck down by the U.S. Court of International Trade in May.
“Because we agree that IEEPA’s grant of presidential authority to ‘regulate’ imports does not authorize the tariffs imposed by the Executive Orders, we affirm” the lower court’s ruling, the majority opinion stated.
IEEPA grants presidents the authority “to deal with any unusual and extraordinary threat” to national security from foreign entities if the president declares a national emergency. The act also allows the president to regulate trade under that emergency.
Beginning Feb. 1, Trump issued several executive orders invoking IEEPA powers to levy tariffs on Canada, Mexico, and China by declaring a national emergency which purported to address illegal drug trafficking. In April, the president declared the long-standing trade deficits between the U.S. and several foreign trading partners to be a national emergency, and imposed so-called “reciprocal tariffs” on several of the nation’s trading partners including the European Union, Japan and Indonesia. The administration was alleging the decades-long retrenchment of the U.S. manufacturing sector, supposed counterfeit goods imports laced with fentanyl, and the nation’s dependence on foreign supply chains were threats to national security.
In its decision, the appeals court said Trump exceeded his authority when he declared national emergencies to impose tariffs under IEEPA. The court also maintained that the power to levy tariffs constitutionally belongs to Congress.
“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 majority opinion reads.
Judges said further that IEEPA’s provision for presidents to “regulate … importation,” does not clearly mean impose tariffs, as the Trump administration has argued.
The court’s decision doesn’t apply to Trump’s industry-specific tariffs, like those on steel, aluminum or chips.
The Trump administration yoyoed for months before finally levying import taxes against more than 70 countries in early August. Under the tariff schedule, the new average tariff rate hit 18.6%, its highest since the Great Depression.
In line with economists’ persistent warnings, federal economic data showed Trump’s tariffs have worsened inflation domestically.
C. Fred Bergsten, an economist who had a long career in federal foreign policy and trade, said Friday he agreed with the court’s ruling.
“I think that’s wholly appropriate and certainly comports with my understanding of the law,” said Bergsten, who helped negotiate IEEPA in the 1970s, “and hopefully it will excise lots of the damage that his tariffs have done.”
Trump lost, Bergsten told TPM, because “there is no national emergency.”
The Trump administration is likely already weighing alternative measures to impose tariffs, said William Reinsch, a senior adviser at the Center for Strategic and International Studies.
“If he loses in the Supreme Court, they’ll try to use other statutes to justify the tariffs,” Reinsch told TPM. He called the appeals court ruling “a victory for the Constitution.”
But whether the administration will win or lose on appeal to the Supreme Court is anyone’s guess, experts said. The conservative court features three Trump-appointed justices — part of a 6-3 conservative majority — and has dramatically expanded executive powers in several rulings. But Reinsch noted the conservative justices would have to contort themselves into knots in order to find in favor of the president and rule against clearly established constitutional powers.
“Article 1 section 8 is pretty clear,” Reinsch said. “Congress gets to set tariffs. If you strictly follow the Constitution, you’re going to have to come out against the president.”
Officials with the Trump administration had thrown out a couple of last-minute attempts to sway the court in their favor. On Aug. 11, a filing from Solicitor General D. John Sauer and Assistant AG Brett Shumate issues a frantic warning. If the U.S. had to forgo the “trillions of dollars” “committed to” the U.S. by foreign governments, the officials predicted a Great Depression moment.
“In such a scenario, people would be forced from their homes, millions of jobs would be eliminated, hard-working Americans would lose their savings,” the filing reads.
In an additional statement filed just hours before the court decision, Treasury Secretary Bessent said suspending Trump’s tariffs would be a “dangerous diplomatic embarrassment.”
Maybe so, but that’s not a legal argument, Bergsten said.
“He’s right, it would be an embarrassment,” Bergsten told TPM. “But that’s not a basis for defending the president against an unconstitutional act.”
Interesting…are we betting the Supremes cave as per usual?
Of course, that little known rule for SCOTUS that exists above the Constitution and reads “Trump can do whatever he wants.”
Cynically, I think it depends on what Roberts’ corporate masters want. I suspect they are not in favor of tariffs, but I don’t always think like an oligarch.
And he has absolute immunity when he does it.
One would assume that, because US companies/persons are the ones paying the inflated tariffs (and not “China”), they’d be in favor of having this imagined “power” stripped from their Stooge in Chief, and getting big refunds, probably with added payments in compensation.
But you are right … who of us peons understands the thinking process of the top 1% of the top 1%?