Trump’s Global Tariffs Rejected by Appeals Court

On August 29, 2025, the U.S. Court of Appeals for the Federal Circuit, sitting en banc, invalidated most of former President Trump's global tariffs. In a 7–4 ruling, judges held that Trump overstepped his authority under the International Emergency Economic Powers Act (IEEPA). That law does not permit the president to impose broad tariffs, a power reserved by the U.S. Constitution to Congress. The decision struck down the baseline 10% tariff on nearly all trading partners, plus additional duties targeting countries like China, Canada, and Mexico. Certain sector-specific tariffs—such as duties on steel, aluminum, autos, or those enacted under other statutes—remain in force for now.

However, the tariffs will remain effective until October 14, 2025, as the administration has time to appeal to the Supreme Court.

Background The “Liberation Day” Tariffs and Related Orders

In early 2025, President Trump declared a series of national emergencies under IEEPA to justify sweeping reciprocal and trafficking tariffs:

In April, under Executive Order 14257, a general 10% ad valorem tariff was imposed on imports from virtually every country, with higher country-specific rates of up to 50% for 57 trading partners labeled as having unfair trade practices—this became known as the Liberation Day tariffs.

Separate trafficking tariffs were imposed in February on Canada and Mexico (25%) and China (20–25%), justified by the administration as a response to fentanyl trafficking and border security threats. These actions were challenged in court by five small businesses and 12 Democratic-led states, including California. The plaintiffs argued the president lacked statutory authority to impose these tariffs without congressional law.

Lower Court Rulings

The United States Court of International Trade (CIT) issued a summary judgment in V.O.S. Selections, Inc. v. United States on May 28, 2025. The panel ruled unanimously that IEEPA does not authorize such sweeping tariffs. The court permanently enjoined enforcement of all Worldwide, Retaliatory, and Trafficking Tariff Orders.

The government appealed to the Federal Circuit and sought a stay of the injunction—which the appeals court granted, allowing the tariffs to remain in place while litigation continued.

Federal Circuit Decision

Key Legal Findings

The International Emergency Economic Powers Act (IEEPA) grants the president authority in very limited circumstances, such as imposing sanctions or freezing assets during emergencies—not to levy tariffs broadly.

The court emphasized that tariffs are a core congressional function, and the Constitution entrusts such powers exclusively to Congress. The majority ruled that the words in IEEPA authorizing the president to “regulate” imports do not encompass broad tariff-making.

The court held that the national emergencies declared by Trump—citing trade deficits or drug trafficking—did not satisfy the strict “unusual and extraordinary” threshold required under IEEPA. Nor did the tariff measures reflect a rational nexus to counter those threats.

Judges pointed out that under the Trade Act of 1974, the president can impose limited, temporary tariffs (up to 15% for no more than 150 days) to address trade deficits—but that statute was not used here. Instead, Trump invoked IEEPA, which was improperly stretched beyond its scope. Procedural Details

The full Federal Circuit heard the case en banc on July 31, 2025. Several judges were skeptical of the administration's arguments during oral argument.

On August 29, 2025, the court issued its ruling: by a 7-4 margin, the appeals court upheld the lower court’s invalidation of the tariffs imposed under IEEPA. At the same time, it issued a temporary stay keeping tariffs in place until mid-October.

The court has remanded the case to the lower court to determine whether the decision applies broadly to all affected importers or only to the parties in the lawsuit. Trump’s Reaction and Political Response

Former President Trump criticized the ruling sharply on his social media platform, calling the court “highly partisan” and warning that letting the decision stand would “‘literally destroy’ the United States.”

The White House spokesman affirmed that the tariffs were enacted lawfully and expressed confidence that the Supreme Court would eventually overturn the decision on appeal.

In California, lawmakers celebrated the ruling. Governor Gavin Newsom, one of the state plaintiffs, hailed the decision as a protection for consumers and businesses. Other states and legal groups echoed the sentiment that the ruling reaffirms constitutional limits on executive trade power.

Economic and Legal Impacts

Business & Trade

Affected importers may be eligible for reimbursement of tens of billions of dollars in tariffs paid since April. The remand proceedings will determine the scope.

Market reactions have included short-term volatility due to uncertainty, though major indices have largely recovered. Some analysts expected that the decision could reduce trade policy risk and improve predictability.

Critics argue that maintaining the tariffs during appeal continues to impose costs on consumers and businesses. Supporters contend the decision protects constitutional checks and balances. Constitutional Precedent

The ruling significantly limits the executive branch’s ability to unilaterally impose trade measures under emergency laws. It reinforces the constitutional principle that only Congress may enact tariffs and taxes. Legal scholars view this as shaping future limits on “major questions” executive authority.

If the Supreme Court affirms, it may restrict future presidents from invoking broadly-worded statutes for sweeping economic actions.

What Comes Next

Supreme Court Appeal

The administration will appeal to the U.S. Supreme Court, asking it to rule that IEEPA does allow tariff authority or that a loophole exists. Trump has vowed to “fight” and claimed Michelin-brand economic stakes.

The Court may consider whether to lift the mid-October stay before the lower courts complete remand procedures. Lower Court Follow-Up

The case will be remanded to the CIT to assess class-wide versus plaintiff-specific relief: whether all affected importers may seek refunds or only those involved in the suit.

Additional challenges pending in other circuits may emerge, including Learning Resources, Inc. v. Trump, where a D.C. district court ruled that IEEPA cannot authorize tariffs at all. Policy Responses and Legislative Options

Congress may consider clarifying trade authority legislation to restrict or expand executive power in emergencies.

The administration could employ other statutory paths, such as the Trade Act or national security statutes like Section 232, but those come with greater procedural constraints. Timeline of Key Events

Date Event

May 28, 2025 CIT judges strike down IEEPA-based global and trafficking tariffs.

May 29, 2025 Federal Circuit grants stay to maintain tariff enforcement.

July 31, 2025 En banc hearing before the Federal Circuit.

August 29, 2025 Appeals Court rules 7–4 that tariffs are illegal under IEEPA; stay through Oct 14.

Until October 14, 2025 Tariffs remain in effect while administration prepares Supreme Court appeal. Why It Matters

1. Checks on Executive Power

The ruling reaffirms that unilateral presidential action cannot substitute for clear congressional authorization—especially on trade and taxation. 2. Legal Precedent

It sets a precedent for challenging executive actions taken under broadly-worded statutes in contexts like trade, immigration, or sanctions. 3. Economic Uncertainty

The decision highlights how unpredictability in trade policy—implemented and reversed quickly—can disrupt markets and supply chains. 4. Possible Refunds

If final decisions invalidate tariffs, importers could receive billions in refunds, reshaping past trade patterns. 5. Future Policy Design

Future administrations may draft more narrowly tailored authorities or seek explicit legislative mandate to avoid legal backlash.

The Federal Circuit’s decision on August 29, 2025, striking down most of Trump’s global tariffs under IEEPA, represents a watershed ruling on presidential authority in trade policy. The ruling doesn’t immediately end the tariffs—but sets in motion legal uncertainty, appeals, and potential repatriation of tariff revenue to affected parties.

As the case moves to the Supreme Court, the justices will confront key constitutional questions about the separation of powers and executive reach under emergency laws. For businesses, lawmakers, and legal scholars, the outcome may define the boundaries of trade authority for years to come.