The legal battle over President Donald Trump’s sweeping global tariffs intensified Friday after a federal appeals court ruled the levies illegal under emergency powers law.
In a 7-4 decision, the US Court of Appeals for the Federal Circuit upheld a May trade court ruling that Trump’s tariffs were unlawfully imposed. However, the judges allowed the duties to remain in place while litigation continues, suggesting that any injunction might apply only to the plaintiffs.
The ruling targets Trump’s “Liberation Day” tariffs, a 10% baseline levy on nations including Mexico, China, and Canada, and his reciprocal tariffs introduced in August against countries without trade deals. The court emphasized that the International Emergency Economic Powers Act (IEEPA), invoked by Trump, was never intended for tariffs.
Critics say the tariffs have acted as a hidden tax on Americans, fueling inflation and job losses. “Once again, a court has ruled the president cannot invent a fake emergency to justify billions in tariffs,” New York Attorney General Letitia James said.
Trump’s administration argues the duties address US trade deficits and crises like fentanyl trafficking. Officials warned striking them down could harm diplomacy. Trump himself called their removal “a total disaster for the Country.”
The uncertainty has left global trading partners unsettled. “Our trading partners must be dazed and confused,” said Wendy Cutler, a former US trade negotiator. She noted India may celebrate its tariff reprieve while China reconsiders concessions in ongoing talks.
With trillions of dollars in trade at stake, the case could head to the Supreme Court. A final ruling against Trump may unravel his trade deals and expose the US to massive refund claims on tariffs already paid.
