US Appeals Court Rules Trump's Global Tariffs Illegal
A US federal appeals court has ruled that most of President Donald Trump's "reciprocal tariffs" are illegal, finding he overstepped his authority by using emergency economic powers. The court affirmed that only Congress holds the power for such sweeping duties. The decision impacts numerous trading partners, including India. However, the tariffs will remain in place temporarily to allow the Trump administration time to appeal to the Supreme Court, marking a significant setback for its aggressive trade policies.
Unpacked:
President Trump relied on the International Emergency Economic Powers Act (IEEPA), a 1977 law granting the president authority to regulate imports during national emergencies. However, the appeals court found that IEEPA does not authorize sweeping tariffs like those imposed by Trump, limiting presidential power in this area.
The decision could ease tensions with countries like India, which were negatively impacted by the tariffs. If the tariffs are ultimately removed, it may improve trade relations and reduce retaliatory measures. However, uncertainty will persist while the administration appeals and the tariffs remain in effect.
If the tariffs are lifted, US consumers may see lower prices on imported goods. The tariffs were estimated to increase annual household costs by $1,200–$2,800 in 2025, so removing them could provide financial relief and reduce inflationary pressures.
The Trump administration can appeal the ruling to the Supreme Court. The tariffs will remain in effect until at least mid-October, allowing time for the appeal. The Supreme Court is expected to consider challenges to the tariffs at its upcoming “long conference.”