A US appeals court has ruled that most tariffs issued by US President Donald Trump are illegal, potentially removing a foreign policy tool that Trump has used extensively during his second term in office. The ruling affects Trump's 'reciprocal' tariffs, imposed on most countries around the world, as well as other tariffs slapped on China, Mexico and Canada.
In a 7-4 decision, the US Court of Appeals for the Federal Circuit rejected Trump's argument that the tariffs were permitted under his emergency economic powers act, calling them 'invalid as contrary to law'. The ruling will not take effect until 14 October to give the administration time to ask the Supreme Court to take up the case.
Trump had justified the tariffs under the International Emergency Economic Powers Act (IEEPA), which gives the president the power to act against 'unusual and extraordinary' threats. Trump has declared a national emergency on trade, arguing that an imbalance is harmful to US national security. But the court ruled that imposing tariffs is not within the president's mandate, and that they are 'a core Congressional power'.
The 127-page ruling states that the IEEPA 'neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the President's power to impose tariffs'. The power to impose taxes and tariffs therefore continues to belong to Congress, the court ruled, and the IEEPA does not override this.
The court expressed skepticism regarding Congress's intention when passing the law to grant unlimited authority to the President. 'Whenever Congress intends to delegate to the President the authority to impose tariffs, it does so explicitly, either by using unequivocal terms like tariff and duty, or via an overall structure which makes clear that Congress is referring to tariffs,' wrote the judges.
This ruling comes in response to two lawsuits filed by small businesses and a coalition of US states after Trump's executive orders in May, which imposed a 10% tariff on every country in the world, alongside reciprocal tariffs on several nations. Notably, this ruling does not apply to tariffs imposed on steel and aluminum, which were enacted under a different presidential authority.
In a 7-4 decision, the US Court of Appeals for the Federal Circuit rejected Trump's argument that the tariffs were permitted under his emergency economic powers act, calling them 'invalid as contrary to law'. The ruling will not take effect until 14 October to give the administration time to ask the Supreme Court to take up the case.
Trump had justified the tariffs under the International Emergency Economic Powers Act (IEEPA), which gives the president the power to act against 'unusual and extraordinary' threats. Trump has declared a national emergency on trade, arguing that an imbalance is harmful to US national security. But the court ruled that imposing tariffs is not within the president's mandate, and that they are 'a core Congressional power'.
The 127-page ruling states that the IEEPA 'neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the President's power to impose tariffs'. The power to impose taxes and tariffs therefore continues to belong to Congress, the court ruled, and the IEEPA does not override this.
The court expressed skepticism regarding Congress's intention when passing the law to grant unlimited authority to the President. 'Whenever Congress intends to delegate to the President the authority to impose tariffs, it does so explicitly, either by using unequivocal terms like tariff and duty, or via an overall structure which makes clear that Congress is referring to tariffs,' wrote the judges.
This ruling comes in response to two lawsuits filed by small businesses and a coalition of US states after Trump's executive orders in May, which imposed a 10% tariff on every country in the world, alongside reciprocal tariffs on several nations. Notably, this ruling does not apply to tariffs imposed on steel and aluminum, which were enacted under a different presidential authority.
