Trump Tariffs Ruled Illegal but Left in Place for Now
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Most of President Donald 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 the case is subject to further review.
The U.S. Court of Appeals for the Federal Circuit on Aug. 29 upheld an earlier ruling by the Court of International Trade that Trump wrongfully invoked an emergency law to issue the tariffs. But the appellate judges sent the case back to the lower court to determine if it applied to everyone affected by tariffs or just the parties involved in the case.
The Aug. 29 could extend the suspense over whether Trump’s tariffs will ultimately stand. The case had been expected to next go to the Supreme Court for a final ruling. The administration could now turn to the justices, who have largely backed the president on other matters. But the White House could also let the Court of International Trade revisit the matter first.
The White House did not immediately respond to a request for comment about the ruling.
Trillions of dollars of global trade are embroiled in the legal fight. A final ruling tossing Trump’s tariffs would upend his much-ballyhooed trade deals. The administration also would be forced to contend with demands to refund tariffs that were already paid.
In its May 30 ruling, the Court of International Trade found Trump improperly used a 1977 emergency powers law to impose broad tariffs, a power vested in Congress by the Constitution. The Federal Circuit judges similarly signaled skepticism of Trump’s claim of broad tariff authority under the International Emergency Economic Powers Act during July 31 oral arguments.
Fearing that the court might rule the tariffs illegal and invalidate them immediately, the administration earlier on Friday filed statements by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Secretary of State Marco Rubio warning of dire foreign-policy consequences if the court took such action. Bessent said it would lead to“dangerous diplomatic embarrassment”for the U.S.
The Aug. 29 order allows the administration to continue to enforce the contested tariff policies while the court action is pending.
The Federal Circuit cited another Supreme Court ruling widely seen as a victory for Trump in sending the case back down to the lower court. The appellate judges said the Court of International Trade needed to consider whether its ruling comported with the high court’s ruling barring judges from issuing so-called universal injunctions that go beyond the parties in a case and apply nationwide.
Challenges to the tariffs were led by a group of small businesses and a separate coalition of Democratic-led states. They argued that the president wrongfully invoked IEEPA. The law grants the president authority over a variety of financial transactions on an emergency basis.
The states and businesses argue Trump’s use of IEEPA is illegal because the law doesn’t mention tariffs and is typically used to levy sanctions and asset freezes during national emergencies. The Trump administration contends the president has broad authority to issue tariffs under the rarely used emergency law, and that his decisions cannot be reviewed by any court.
The ruling applies to Trump’s “Liberation Day” global tariffs that were set at a 10% baseline and have been in effect for months purportedly to address the U.S. trade deficits. The decision also affects the extra levies on Mexico, China and Canada that Trump said were justified by the ongoing fentanyl crisis in the U.S.
The decision also covers Trump’s so-called reciprocal tariffs that took effect Aug. 7 for dozens of nations that failed to reach trade deals with the administration by. Various carve-outs and extensions have been announced since then, leaving the final tariffs for some nations up in the air.
The states and businesses argue that trade deficits are a persistent part of the US economy and therefore not an emergency, and that the fentanyl-related tariffs are a dressed-up negotiating tactic rather than a legitimate effort to stem the flow of drugs.
The case is V.O.S. Selections v. Trump, 25-1812, 25-1813, US Court of Appeals, Federal Circuit.
Erik Larson, Zoe Tillman, Bob Van Voris and Greg Stohr contributed to this report.
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