The Donald Trump administration now faces a big test as a US federal appeals court has struck down most of the tariffs he imposed.
It said they were illegal and beyond his presidential powers to impose them.
According to reports, the decision, delivered in a 7-4 vote by the US Court of Appeals for the Federal Circuit, rejected Trump’s claim that the tariffs were justified under the International Emergency Economic Powers Act (IEEPA).
The ruling affects Trump’s “reciprocal” tariffs, which applied broadly to countries worldwide, as well as tariffs placed on China, Mexico and Canada. It does not affect levies introduced under other authorities, such as those on steel and aluminum.
The decision followed lawsuits from small businesses and US states, who challenged the tariffs after Trump’s 2024 executive orders imposed a baseline 10% tariff on nearly all countries and additional reciprocal tariffs. The New York-based Court of International Trade had previously ruled the tariffs unlawful, but that ruling was stayed pending appeal.
Lawyers for the administration had warned that overturning the tariffs could trigger a financial collapse similar to the 1929 stock market crash, arguing the levies were critical to protecting US security and foreign policy interests.
The ruling, which takes effect on 14 October unless overturned, is expected to be appealed to the US Supreme Court. The case could become a major test of presidential powers, as the top court has increasingly struck down sweeping executive actions not explicitly authorised by Congress. With six of its nine justices appointed by Republicans, including three by Trump himself, the Supreme Court’s eventual stance could reshape the limits of presidential authority on trade.
