President Donald Trump’s trade strategy suffered a major setback after a federal appeals court ruled that most of his “reciprocal tariffs” were imposed illegally.
In a 7-4 decision on Friday, the U.S. Court of Appeals for the Federal Circuit said Trump exceeded his authority when he announced sweeping levies on nearly every trading partner during his April 2 “liberation day” address. The court ruled that the 1977 International Emergency Economic Powers Act (IEEPA), which Trump cited to justify the tariffs, does not grant the president authority to impose such duties.
“The core Congressional power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution,” the judges wrote.
The duties, which cover more than 60 nations and in some cases reach as high as 50%, will remain in place until Oct. 14 while the administration appeals to the Supreme Court. Before the ruling, Trump’s tariffs were on track to affect nearly 70% of all U.S. imports. If struck down, they would cover only about 16%, according to the Tax Foundation.
The court also rejected Trump’s justification for tariffs on China, Mexico and Canada, which the administration said were necessary to combat fentanyl trafficking. Those levies, along with the broader reciprocal tariffs, were deemed unlawful.
Trump responded by vowing to fight the decision. “If allowed to stand, this Decision would literally destroy the United States of America,” he wrote on social media.
If the Supreme Court upholds the ruling, Trump could still seek other legal avenues, such as the 1974 Trade Act. But that law limits tariffs to 15% for 150 days unless Congress extends them, significantly narrowing his options.
Not all of Trump’s trade measures were struck down. His sector-specific tariffs on steel and aluminum remain untouched because they were imposed under separate presidential authority known as Section 232. Earlier this month, those duties were expanded to cover more than 400 additional products. Trade lawyers say such targeted tariffs are less vulnerable to legal challenges.
Levies first imposed on China during Trump’s first term and later maintained by Joe Biden also remain intact. In addition, the administration’s elimination of the “de minimis” exemption on imports under $800 — a move that hits small and medium-sized businesses — is unaffected by the appeals court ruling.
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