President Donald Trump’s tariffs strategy has been ruled illegal by the U.S. Court of Appeals, delivering a major blow to his attempt to reset the “unfair” terms of international trade.
In a ruling on Friday, the court agreed with a May finding from the Court of International Trade that found the president had overreached the authority he had claimed under a decades-old emergency economic powers act to place hefty levies on goods imported from America’s trading partners.
Trump was incensed by the decision, insisting it was “highly partisan” and “would literally destroy the United States of America.”
In his latest Truth Social posts, he has warned that $15 trillion in new investment could be lost as a result of the court’s actions and declared that, without his tariff program: “In many ways, we would become a Third World Nation, with no hope of GREATNESS again.”
His measures remain in place for now, however, and will stay in effect until October 14 to allow him to take his complaint to the U.S. Supreme Court. Here’s a look at Trump’s policy and the current state of play.
What are the tariffs?
After much fanfare, Trump announced his “Liberation Day” tariffs in the White House Rose Garden on April 2, invoking the International Emergency Economic Powers Act (IEEPA) of 1977 to set a 10 percent baseline tax on all imports and even higher taxes on goods being shipped from nearly every one of America’s trading partners, with China, Canada and Mexico among those hardest hit.
However, the president’s announcement sent shockwaves through the world’s stock markets as investors panicked over their likely economic consequences, eventually forcing Trump into a rethink. He duly announced a week later that the implementation of the tariffs would be suspended for 90 days, a deadline that was eventually extended until August.
Administration officials led by Commerce Secretary Howard Lutnick used the intervening summer months to attempt to broker custom deals with other countries but only succeeded in securing a handful of agreements, notably with the U.K. and Vietnam.
A revised list of tariffs that came into effect on August 7 saw India (51 percent), Syria (41 percent), Laos (40 percent), Myanmar (4o percent) and Switzerland (39 percent) particularly hard done by.
The reason given for India’s rate being so high was the superpower’s continued purchase of Russian oil, despite its invasion of neighboring Ukraine, while Canada (35 percent) was being punished for allegedly “failing to cooperate” with the U.S. on cracking down on the illegal fentanyl trade.
What has the court said?
In its seven-four decision of Friday, the appeals court backed the international trade court’s finding that Trump did not have the authority to impose global tariffs under the IEEPA.
The emergency law Trump invoked to justify those taxes “neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the president’s power to impose tariffs,” the appellate judges noted.
“The government has not pointed to any statute or judicial decision that has construed the power to regulate as including the authority to impose tariffs without the statute also including a specific provision in the statute authorizing tariffs,” they said.
Justice Department attorneys had argued that Trump’s use of the law to impose his import taxes was a vital part of the president’s authority to conduct foreign policy and therefore not reviewable by courts. But the judges said they were “unpersuaded” by that line of reasoning.
“While the president of course has independent constitutional authority in these spheres, the power of the purse (including the power to tax) belongs to Congress,” the judges wrote. They added that the emergency law “did not give the president wide-ranging authority to impose tariffs.”
What happens now?
White House spokesperson Kush Desai reacted to the verdict by insisting that Trump had “lawfully exercised the tariff powers granted to him by Congress to defend our national and economic security from foreign threats.”
“We look forward to ultimate victory on this matter,” he added, signalling that an appeal to the highest court in the land was forthcoming.
The Supreme Court has a conservative-majority bench – six of its nine justices were nominated by Republican presidents, three of those by Trump personally – suggesting they might be more inclined to find in his favor should they chose to hear the case.
However, the justices might also be wary that agreeing with the president and overturning the Court of Appeals’ verdict would serve as a ringing endorsement for Trump’s aggressive use of the IEEPA, paving the way for him to weaponize it further in future.
How has Trump reacted?
Reacting to the judgement, the president posted on Truth Social: “ALL TARIFFS ARE STILL IN EFFECT! Today a Highly Partisan Appeals Court incorrectly said that our Tariffs should be removed, but they know the United States of America will win in the end.
“If these Tariffs ever went away, it would be a total disaster for the Country. It would make us financially weak, and we have to be strong. The U.S.A. will no longer tolerate enormous Trade Deficits and unfair Tariffs and Non Tariff Trade Barriers imposed by other Countries, friend or foe, that undermine our Manufacturers, Farmers, and everyone else.”
He continued: “If allowed to stand, this Decision would literally destroy the United States of America. At the start of this Labor Day weekend, we should all remember that TARIFFS are the best tool to help our Workers, and support Companies that produce great MADE IN AMERICA products. For many years, Tariffs were allowed to be used against us by our uncaring and unwise Politicians. Now, with the help of the United States Supreme Court, we will use them to the benefit of our Nation, and Make America Rich, Strong, and Powerful Again!”
Trump has since focused on making claims about the economic fallout of the verdict, issuing his “Third World Nation” warning on Sunday and following that up with a meme claiming to have already generated $8 trillion in revenue from the tariffs since his program was introduced.
Most recently, he wrote: “Without Tariffs, and all of the TRILLIONS OF DOLLARS we have already taken in, our Country would be completely destroyed, and our military power would be instantly obliterated. In a 7 to 4 Opinion, a Radical Left group of judges didn't care, but one Democrat, Obama appointed, actually voted to save our Country. I would like to thank him for his Courage! He loves and respects the U.S.A.”
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