Federal Appeals Court Blocks Trump’s Tariffs Amid Controversy Over Presidential Powers

WASHINGTON (AP) — In a significant legal setback for President Donald Trump, a federal appeals court has ruled against his sweeping power to impose tariffs on foreign imports without congressional approval. The U.S. Court of Appeals for the Federal Circuit found that Trump’s claims of virtually unlimited authority to bypass Congress in this matter overstep the bounds of the law.

The Court’s Ruling

The ruling, issued on Friday, largely upholds a previous decision by a specialized federal trade court in New York. While the appeals court dismissed part of the earlier ruling that would have eliminated Trump’s tariffs immediately, it still blocked the justification he used—declaring national emergencies to justify steep import taxes.

The decision adds to the mounting challenges against Trump’s trade policies, which have already contributed to volatility in financial markets and increased concerns over rising prices and economic stagnation.

The court’s decision revolves around an array of tariffs that Trump imposed in April on nearly every U.S. trading partner, as well as those imposed on China, Mexico, and Canada in previous periods. On April 2, dubbed “Liberation Day” by Trump, the president enacted “reciprocal tariffs” as high as 50% on countries where the U.S. has a trade deficit, with a baseline tariff of 10% on virtually all others.

Though the president initially suspended these tariffs for 90 days to allow countries to negotiate trade agreements, those that failed to meet his demands faced heavier penalties. For example, Laos saw a staggering 40% tariff, while Algeria was hit with a 30% levy, alongside the retained baseline tariffs.

Legal Justifications Under Scrutiny

Trump’s justification for these tariffs rests on the 1977 International Emergency Economic Powers Act (IEEPA), under which he declared the longstanding trade deficits a national emergency. In early 2022, he also invoked this law to impose tariffs citing illegal immigration and drug flows from Canada, Mexico, and China as further reasons.

While the U.S. Constitution allocates the power to set tariffs to Congress, successive administrations have allowed for greater presidential control in this area. The appeals court found that Trump’s actions, however, exceeded what is permissible under the emergency powers law.

Reasons for the Court’s Decision

The administration argued that previous legal precedents, specifically during Richard Nixon’s presidency, allowed for emergency tariff rulings in times of economic crisis. However, the U.S. Court of International Trade rejected that notion, stating that Trump’s tariffs on “Liberation Day” exceeded any existing presidential authority.

The appeals court echoed this sentiment, emphasizing that it seems unlikely Congress had intended to grant the president unlimited power to impose tariffs.

Implications for Trump’s Trade Agenda

The ruling raises significant questions about the future of Trump’s trade policies. The administration has cautioned that striking down these tariffs could necessitate refunds of the $159 billion collected in tariffs by mid-year, far exceeding figures from the previous year. This financial burden could threaten the stability of the U.S. Treasury.

Furthermore, the ruling could hinder Trump’s negotiating tactics in future trade discussions, as it may embolden foreign governments to resist U.S. demands or delay prior agreements.

Next Steps for the Trump Administration

In response to the ruling, Trump has vowed to take the matter to the Supreme Court, stating that allowing the decision to stand would have catastrophic implications for the country. Although Trump has alternative legal mechanisms to impose tariffs, such pathways come with restrictions that limit their speed and scope, potentially complicating his strategies.

For instance, other statutory options allow tariffs of only 15% for limited periods
on countries with substantial trade deficits, and any new tariffs imposed under Section 232 of the Trade Expansion Act require a thorough Commerce Department investigation.

Conclusion

This ruling marks a pivotal moment in the ongoing debate over presidential authority regarding trade tariffs. As the Trump administration prepares to appeal, the outcome could redefine the boundaries of executive power and influence U.S. trade relations moving forward.