WASHINGTON, D.C. – In a dramatic turn for U.S. trade policy, a federal appeals court has delivered a resounding rebuke to Donald Trump’s sweeping tariffs – a decision that questions the president’s authority and places United States tariff powers squarely in the hands of Congress.
On August 29, 2025, the full panel of the U.S. Court of Appeals for the Federal Circuit ruled 7–4 that most of Trump’s tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), exceeded the executive branch’s authority.
The court affirmed a prior judgment by the U.S. Court of International Trade and notably held that IEEPA “does not authorize the power to impose tariffs,” a domain inherently reserved for the legislative branch.
Nevertheless, the ruling is temporarily stayed; the tariffs will remain in effect until October 14, giving the administration time to take the matter to the Supreme Court.
This legal delay underscores the stakes: should the Supreme Court uphold the ruling, the ramifications could be immense – including forced refunds of billions collected in tariff revenue.
The decision underscores a core constitutional principle: the U.S. Constitution grants Congress the power to levy taxes and regulate commerce with foreign nations.
While successive laws have delegated limited authority to the executive (notably via the Trade Act of 1974 or Section 232 investigations), courts maintain that tariffs remain firmly within the legislative domain.
The current case centers on two sets of measures: Trump’s “Liberation Day” tariffs – a 10% baseline on virtually all imports and steep “reciprocal” tariffs targeting trade-deficit nations and earlier emergency tariffs targeting China, Mexico, and Canada under IEEPA. Both are now legally vulnerable.
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What’s Ahead for the United States
Legal experts expect the Supreme Court to step into this high-stakes battle. Should the Court rule against Trump, opponents argue that future administrations will face tighter limits when invoking emergency powers for sweeping economic actions – a potential restraint on executive overreach.
Meanwhile, the Trump administration is preparing backup plans.
These include citing alternative statutes that grant limited tariff authority such as those allowing 150-day tariffs capped at 15%.
Still, such measures are markedly less powerful than the sweeping levies Trump favored.
On trade diplomacy, U.S. Trade Representative Jamieson Greer reassures that negotiations continue globally despite the court setback.
However, critics warn that legal uncertainty casts a long shadow over American businesses and global markets.
From an economic perspective, keeping tariffs in limbo may hinder long-term planning for companies, while the possibility of reimbursements could strain federal finances.
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