The US Court of Appeals for the Federal Circuit in Washington, DC, ruled in a 7-4 decision that most of President Donald Trump’s tariffs are illegal, challenging a key pillar of his economic policy. The court allowed the tariffs to remain in place until October 14, 2025, giving the Trump administration time to appeal to the US Supreme Court.
The Federal Circuit’s decision targets Trump’s “reciprocal” tariffs, imposed in April 2025, and separate tariffs against China, Canada, and Mexico from February 2025. These levies, justified under the International Emergency Economic Powers Act (IEEPA), were deemed unlawful. The court stated, “The statute grants significant authority to the President during a national emergency, but it does not explicitly include the power to impose tariffs or taxes.” The IEEPA, enacted in 1977, has traditionally been used for sanctions or asset freezes, not tariffs, making Trump’s application unprecedented.
#BREAKING: Hayes: "In a huge blow to the White House and its agenda…a federal appeals court has just ruled that Trump's sprawling tariffs are unlawful and invalid."😳 pic.twitter.com/6TuR4wmbhy
— Emoluments Clause (@Emolclause) August 29, 2025President Trump expressed frustration, calling the court “highly partisan” in a Truth Social post. He warned, “If these tariffs went away, it would be a disaster for the country.” Confident in a reversal, he added that the Supreme Court would support his tariff policies. The administration argues that IEEPA allows import regulation during emergencies, citing trade imbalances and fentanyl smuggling as justifications.
Context and Legal Challenges
Trump’s tariffs, a cornerstone of his second term, aim to pressure trading partners into economic concessions. In April, he declared a national emergency over the US trade deficit, a decades-long issue, claiming it undermines manufacturing and military readiness. The February tariffs targeted China, Canada, and Mexico for allegedly failing to curb illegal fentanyl flows, a claim the countries denied. The ruling does not affect other tariffs, such as those on steel and aluminium, imposed under a different legal authority.
Most of President Trump’s global tariffs were ruled illegal by a federal appeals court that found he exceeded his authority in imposing them, but the judges let the levies stay in place while sending the case back to a lower court for further proceedings https://t.co/dIu77O5ogA pic.twitter.com/g3NxIQpe9h
— Bloomberg TV (@BloombergTV) August 29, 2025The decision stems from lawsuits filed by five small U.S. businesses and 12 Democratic-led states, which argue that Congress, not the president, holds tariff authority under the Constitution. The New York-based US Court of International Trade also ruled against Trump’s tariffs on May 28, 2025, reinforcing the Federal Circuit’s stance.
The ruling introduces uncertainty into US trade policy, with minimal immediate market reaction, according to Bloomberg. Analyst Art Hogan noted, “The market doesn’t need more trade uncertainty.” The Trump administration is preparing alternative legal strategies, such as using other trade statutes, according to William Reinsch of the Centre for Strategic and International Studies. Additionally, Trump’s legal fight to remove Federal Reserve Governor Lisa Cook could further escalate tensions with the Supreme Court, which has a 6-3 conservative majority but has resisted broad statutory interpretations.
