The core of Donald Trump’s global trade offensive has been struck down by a federal appeals court, which ruled his use of a national emergency law to implement sweeping tariffs was illegal. The decision casts a shadow over his entire protectionist agenda and could unravel trade understandings reached with key economic partners worldwide.
The U.S. Court of Appeals for the Federal Circuit found that the former president exceeded his authority under the International Emergency Economic Powers Act (IEEPA). This law was intended for actions like freezing assets of hostile nations, not for setting broad economic policy. The court emphasized the absence of the word “tariffs” in the statute as evidence of congressional intent.
This legal setback directly challenges the “baseline” 10 percent tariff applied to most nations and higher rates for others, which formed the basis of Trump’s “reciprocal” trade doctrine. His administration’s argument that a persistent trade deficit qualified as a national emergency failed to persuade the court, which saw it as a misuse of presidential power.
With an appeal to the Supreme Court all but certain, the final fate of the tariffs hangs in the balance. The ruling, however, immediately raises questions about the legitimacy of deals struck with the EU, South Korea, and others to avoid these levies. Furthermore, it initiates a process to determine if billions collected from these tariffs should be refunded to American companies.