Appeals Court Rules Trump’s Tariffs Illegal

A federal appeals court ruled Friday that most of President Donald Trump’s global tariffs are illegal, striking a massive blow to the core of his aggressive trade policy.

The U.S. Court of Appeals for the Federal Circuit held in a 7-4 ruling that the law Trump invoked when he granted his most expansive tariffs — including his “reciprocal” tariffs — does not actually grant him the power to impose those levies.

“The core Congressional power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution,” the court said. “Tariffs are a core Congressional power.”

The appellate court paused its ruling from taking effect until Oct. 14, in order to give the Trump administration time to ask the Supreme Court to reverse the decision.

Trump later Friday attacked the appeals court as “Highly Partisan” and asserted that the Supreme Court will rule in his favor.

“If these Tariffs ever went away, it would be a total disaster for the Country,” Trump wrote in a Truth Social post. “If allowed to stand, this Decision would literally destroy the United States of America.”

“The President’s tariffs remain in effect, and we look forward to ultimate victory on this matter,” White House spokesman Kush Desai said in a separate statement.

Friday’s ruling is the second straight loss for Trump in the make-or-break case, known as V.O.S. Selections v. Trump.

The case was consolidated from two separate lawsuits, one filed by a dozen states and the other by five small U.S. businesses.

It is the furthest along of more than half a dozen federal lawsuits challenging Trump’s use of the International Emergency Economic Powers Act, or IEEPA, to impose sweeping tariffs.

“For the second time in this case, a federal court has held that the President’s so-called ‘Liberation Day’ tariffs are unlawful,” said attorney Jeffrey Schwab of the Liberty Justice Center, which represented the small-business plaintiffs in the case.

“This decision protects American businesses and consumers from the uncertainty and harm caused by these unlawful tariffs,” Schwab said in a statement.

“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,” said Neal Katyal, Schwab’s co-counsel, in the statement.

The Trump administration has argued that IEEPA empowers the president to effectively impose country-specific tariffs at any level if he deems them necessary to address a national emergency.

The U.S. Court of International Trade in late May rejected that stance and struck down Trump’s IEEPA-based tariffs, including his worldwide reciprocal tariffs. That ruling also cancelled Trump’s tariffs on Canada, Mexico and China, which were imposed to address the alleged trafficking of fentanyl into the U.S.

The Federal Circuit quickly paused that ruling while Trump’s appeal played out. But multiple appellate judges appeared highly skeptical of the Trump administration’s arguments when they heard oral arguments in late July.

In Friday’s ruling, the court found that the challenged tariffs exceeded Trump’s authority under IEEPA.

“Both the Trafficking Tariffs and the Reciprocal Tariffs are unbounded in scope, amount, and duration,” the majority ruled.

“These tariffs apply to nearly all articles imported into the United States (and, in the case of the Reciprocal Tariffs, apply to almost all countries), impose high rates which are ever-changing and exceed those set out in the [U.S. tariff system], and are not limited in duration.”

The four dissenters said they disagreed with the majority’s conclusion on the question of the tariffs’ legality.

And the dissent said the plaintiffs had not justified their argument for a summary judgment in their favor.

The appeal was considered by 11 of the 12 judges on the Federal Circuit. The twelfth judge on the court, Pauline Newman, did not participate in the case, as she has been suspended from her duties since 2023. Newman, 98, is in a long-running dispute with the court over a request that she undergo a cognitive evaluation in order to continue hearing cases.

The appeals court decision came just hours after Trump’s top trade negotiators urged the judges to consider what they called “supplemental developments” in the case, including an assessment from the Congressional Budget Office that tariffs will reduce U.S. deficits by $4 trillion over the next decade.

Striking down the tariffs Trump imposed under IEEPA “would cause massive and irreparable harm to the United States and its foreign policy and national security both now and in the future,” Commerce Secretary Howard Lutnick said in a declaration to the court.

“Such a ruling would 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,” he said.