In a landmark decision, the US Court of Appeals for the Federal Circuit ruled on May 28 that most of Donald Trump’s tariffs are illegal, marking a significant setback for the former president’s trade policies. The court found that Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA) when he imposed tariffs on various imports. This decision follows at least eight lawsuits against these tariffs, including one from the state of California.
The IEEPA, which was enacted in 1977, gives the president authority to sanction foreign threats. During national emergencies, it gives them the power to freeze assets wholesale. Trump defended his tariff-heavy policies using this obscure law. He argued that the rising trade deficit was devastating US manufacturing capacity and endangering military preparedness. The court’s decision signals a fairly serious limit on presidential unilateralism when it comes to imposing tariffs.
Legal Background and Court Findings
Those three tariffs were just one chapter in a story of far-reaching tariffs that Trump implemented throughout his presidency. The previous round of tariffs was aimed at China, Canada, and Mexico. These “reciprocal” tariffs were a focal point of his costly and largely ineffective competitive trade war with China. The second batch hit imports of steel and aluminum. It was, in effect, struck down under unrelated legal authority, but nevertheless survived intense scrutiny in several separate legal challenges.
That 7-4 decision firmly established the president’s vast powers under a declared national emergency. It told them what they have no power to do, which is set tariffs. In affirming the lower court’s ruling, the appeals court noted that the statute does provide the president broad discretion to pursue wide-ranging activities during a declared national emergency. More importantly, it explicitly said that this authority does not extend to the authority to impose tariffs, duties, or taxes.
The ruling underscored that it is improbable Congress intended to grant the president unlimited authority over tariff imposition when enacting IEEPA.
Trump’s Response to the Ruling
Reacting to that ruling, Trump tweeted defiantly this morning that all of the tariffs are still on. He announced at the time, “Tariffs are here to stay! Today, a totally controlled, very bad & highly partisan Ninth Circuit Court erroneously ruled that we should drop them – but they don’t understand the strength of America! His remarks were surprising only in how directly they reflect his ongoing commitment to using tariffs as an offensive tool to reshape American economic policy.
That’s a pretty big defect—that’s precisely what Trump’s administration had argued the IEEPA permitted in imposing these tariff measures as part of an emergency response. His Department of Justice argued that the statute allows the president to “control” imports, or stop them altogether. This latest ruling has raised questions about the extent of executive power when it comes to international trade policies.
Implications for Trade Policy
The court’s ruling deeply affects Trump’s legacy. The agreement does more than provide economic relief, though it sets an important precedent for future administrations as to the limits of presidential authority in trade matters. Tariffs were the bricks Trump’s foreign policy was built on. He smartly wields them to bring political pressure, and he re-negotiates trade agreements with exporting countries.
This particular change would have deep ramifications for US trade relations going forward. The real reason that Trump continues to advance his inaccurate ideologies on tariffs and trade deficits. Stakeholders across domestic and international markets continue to closely monitor the evolving legal landscape for additional guidance.
