Donald Trump’s authority to impose his sweeping “reciprocal” tariffs has been invalidated by a U.S. appeals court in a ruling that finds he lacked the legal power to do so under the emergency legislation he cited. The decision puts a major part of his trade legacy at risk of being completely dismantled.
The court focused on the former president’s use of the International Emergency Economic Powers Act (IEEPA), stating that the law’s text provides no basis for imposing tariffs. The judges noted that if Congress had intended to grant such a monumental power, it would have done so explicitly and with clear procedural safeguards, which are absent from the IEEPA.
This ruling has created a significant headache for the current state of global trade relations. Handshake deals with key allies, designed to ward off the IEEPA tariffs, are now based on a voided premise. The decision validates the arguments of those who claimed Trump was operating outside the bounds of established U.S. law.
With the case likely heading to the Supreme Court, the ultimate outcome remains uncertain. However, the appeals court’s decision is a powerful statement on the separation of powers. It also starts the clock on a potential multi-billion dollar repayment process to the American businesses that have been paying the tariffs.