TLDR
- Appeals court rules 7-4 that Trump tariffs exceed presidential authority.
- Tariffs remain active until Oct. 14 as the government prepares to appeal.
- The court says tariffs under IEEPA are beyond executive branch authority.
- Ruling affects reciprocal and trafficking tariffs but not metal duties.
A federal appeals court has ruled that most of President Donald Trump’s tariffs are unlawful, challenging one of his main trade policies. The 7-4 decision questions his authority to impose broad import taxes under the International Emergency Economic Powers Act.
Court Ruling Challenges Trump’s Tariff Strategy
A federal appeals court has ruled that most tariffs imposed by President Donald Trump are unlawful. The 7-4 decision said that the tariffs exceeded the powers granted to the president under the International Emergency Economic Powers Act (IEEPA).
The decision specifically questioned Trump’s authority to introduce wide-ranging tariffs on imports from countries such as China, Canada, and Mexico. Judges wrote that tariffs are a power held by Congress, not the executive branch. The ruling will take effect on October 14 unless the administration files a successful appeal.
Tariffs Remain in Effect During Appeal Process
For now, the tariffs will stay in place. The court said this pause is necessary to allow the government time to challenge the ruling. President Trump quickly responded on Truth Social, stating that “ALL TARIFFS ARE STILL IN EFFECT” and calling the court “highly partisan.”
Trump argued that tariffs are an essential tool to protect American workers and reduce trade deficits. He said removing them would be “a total disaster for the Country” and expressed confidence that the Supreme Court will ultimately back his position.
Which Tariffs Are Affected by the Decision
The court targeted Trump’s “reciprocal tariffs” announced on April 2 and his “trafficking tariffs” unveiled on February 1. These measures applied to major trading partners, including Mexico, Canada, and China. Judges said both sets of tariffs were “unbounded in scope, amount, and duration.”
Other tariffs imposed under different legal grounds, such as those on steel, copper, and aluminum, remain unaffected. The court noted that the IEEPA had never been used by a president to levy tariffs, as it is usually applied to sanctions during emergencies.
Trade and Market Reactions
The ruling came shortly after U.S. markets closed for the Labor Day holiday weekend. This timing prevented an immediate reaction from Wall Street, though cryptocurrency markets remained open. Bitcoin and other digital assets saw little immediate movement after the news.
Experts said reduced trade tensions from fewer tariffs could eventually boost risk assets, including digital currencies. Lower tariffs often encourage economic recovery and consumer spending. However, the court’s decision has not yet taken effect, and tariffs remain active while the legal process continues.
Impact on Trade Talks and Consumers
The Treasury Department had aimed to conclude trade talks with international partners by Labor Day. That deadline has now been pushed back as negotiations adjust to the legal uncertainty. Treasury Secretary Scott Bessent had sought agreements based on the existing tariff structure, which now faces doubt.
American consumers have already felt the effect of higher import costs. Retailers such as Walmart and BestBuy have raised prices, citing the tariffs. Wholesale price indexes also showed increases last month, suggesting households may continue to see higher bills while tariffs remain in place.
Trump has said his trade strategy is designed to reduce what he calls unfair practices and strengthen U.S. jobs. With the court’s ruling now moving toward the Supreme Court, the future of these tariffs remains unsettled.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
