Federal Appeals Court Rules Majority of President Trump’s Tariffs Illegal

What Happened?

A federal appeals court ruled that nearly all of the tariffs imposed by the Trump Administration are illegal, but it left the tariffs in place until October 14^th to give the Trump Administration time to appeal to the Supreme Court. The court found that the International Emergency Economic Powers Act of 1977 does not grant the President sweeping authority to impose tariffs.

The ruling does not affect tariffs that were imposed under different pieces of federal legislation. In response to the ruling, the Trump Administration asked the Supreme Court to quickly overturn the decision. 

Why it Matters

Though the appeals court ruling left the tariffs in place pending a Supreme Court appeal, the uncertainty over the tariff’s future will likely add volatility to an already tumultuous market. Affected businesses will have more difficulty planning their future strategies without knowing whether or not the tariffs will remain. 

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For President Trump, the ruling is a potentially devastating blow politically because he has made the tariffs the centerpiece of his administration’s foreign policy. The tariffs gave President Trump additional leverage to extract concessions from other countries they likely would not have otherwise given.

Meanwhile, President Trump’s political opponents stand to gain if the Supreme Court upholds the ruling, because they would then be able to campaign against Republicans by accusing them of supporting illegal tariffs. If the tariffs are invalidated by the Supreme Court, it will likely be a major issue in the 2026 mid-term Congressional elections.

The Supreme Court has given few indications of how it might rule on the tariff decision, and in the past couple of years Supreme Court justices have not always voted along party lines. Because the judicial branch is separate from and equal to the executive branch, there is nothing directly the Trump Administration can do to affect the outcome. President Trump can and has argued in favor of overturning the lower court ruling, but the Supreme Court has disagreed with presidents before.

If the Supreme Court reverses the lower court ruling, it will be a major political victory for the Trump Administration. Allowing the tariffs to remain in place indefinitely will allow the Trump Administration to continue using the tariffs as leverage to force other countries to accept deals on terms more favorable to the United States. 

The legacy of the Trump Administration tariffs on U.S. allies and partners abroad will probably be a lasting one. Many countries friendly to the U.S. have been angered by the tariffs and they will likely seek economic payback at some point in the future.

How it Affects You

The outcome of the Supreme Court decision on the Trump Administration’s tariffs will likely affect global markets and the prices of goods for consumers for years to come. It could also shape the political fortunes of both Democrats and Republicans in next year’s Congressional elections.

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