Donald Trump’s trade war strategy suffered a major setback after a U.S. appeals court ruled that the former president overstepped his authority when he imposed sweeping tariffs under emergency powers.
In a 7–4 decision, the Court of Appeals for the Federal Circuit said Trump misused the International Emergency Economic Powers Act (IEEPA) to levy duties on imports from China, Canada, and Mexico. The judges concluded that while the law gives presidents wide latitude during crises, it does not grant the power to create new tariffs.
The ruling strikes directly at Trump’s so-called “reciprocal tariffs,” rolled out in 2019 as part of his aggressive bid to rewrite global trade relationships. Levies enacted under separate statutes — such as those targeting steel and aluminum — remain untouched.
Trump Defiant
Trump dismissed the decision as partisan, warning that scrapping the tariffs would spell a “total disaster” for American industry. On his social media platform, he expressed confidence the Supreme Court’s conservative majority would ultimately back his policies.
His legal team had argued that persistent trade deficits, factory closures, and cross-border drug flows justified declaring a national emergency — and that such a declaration empowered the White House to regulate imports without congressional approval.
Markets and Politics on Edge
The ruling injects fresh volatility into markets already rattled by global trade disputes. Analysts say the administration anticipated a challenge and may seek other legal grounds to preserve parts of the tariff program.
“The last thing corporate America needs is more trade uncertainty,” said Art Hogan, chief market strategist at B. Riley Wealth.
For now, the tariffs will remain in effect until October 14, giving Trump’s team time to appeal. But the broader fight is far from over. Legal experts predict the case could become a defining test of how much power presidents have to reshape U.S. trade policy without Congress — and the Supreme Court may soon be forced to draw the line.
