A US federal appeals court has dealt a significant blow to Donald Trump’s economic agenda, ruling that most of his sweeping global tariffs were illegally imposed. In a 7-4 decision, the Court of Appeals found that the former president overstepped his authority by using the International Emergency Economic Powers Act (IEEPA) to justify tariffs on nearly every US trading partner.
The court upheld an earlier ruling from the Court of International Trade, which had rejected Trump’s claim that trade imbalances constituted a national security emergency. Judges concluded that the IEEPA does not grant the president power to impose tariffs, noting that such authority rests with Congress. “The power of the purse (including the power to tax) belongs to Congress,” the decision stated.
Despite the ruling, the tariffs will remain in place until mid-October, giving the administration time to appeal to the US Supreme Court. Trump immediately blasted the judgement as “highly partisan” and warned it would “destroy the United States” if allowed to stand.
The stakes are high. Economists warn that uncertainty over the legality of the tariffs could dampen global trade activity in the short term. Businesses may delay deals with the US as they await clarity from the Supreme Court. Meanwhile, America’s trading partners, including the UK, Japan and South Korea, could see their bilateral agreements with Washington thrown into doubt.
If the Supreme Court upholds the appeals court’s ruling, the US may face pressure to reimburse billions of dollars collected through the tariffs. This could spark chaos in financial markets and complicate ongoing trade negotiations. On the other hand, if the justices side with Trump, it could embolden future presidents to use emergency powers more aggressively, setting a powerful precedent.
The case also carries political ramifications. Trump has built much of his economic brand on tariffs, portraying them as leverage to protect American industries. A final defeat at the Supreme Court would weaken his credibility as a dealmaker, while a victory could solidify his campaign narrative of restoring American strength.
With the clock ticking toward October, the fate of Trump’s signature policy and its impact on the global economy now lies in the hands of the Supreme Court.
