A U.S. court has ruled that Donald Trump’s tariffs are illegal, which could force the government to repay billions of dollars in duties.
The US Court of Appeals for the Federal Circuit said on Friday that it is against the law for Mr. Trump to use emergency powers to unilaterally impose import taxes on other countries.
The 7-4 decision raises questions about deals the president made with the European Union, Japan, South Korea, and other major trading partners to reduce tariff rates from those originally set on April’s Liberation Day.
It could also challenge tariffs Mr. Trump imposed on China, Canada, and Mexico to pressure them to stop fentanyl from entering the U.S.
The court said: “The statute bestows significant authority on the President to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax.”
In response, Mr. Trump posted on social media: “ALL TARIFFS ARE STILL IN EFFECT! Today a Highly Partisan Appeals Court incorrectly said that our Tariffs should be removed, but they know the United States of America will win in the end. If these Tariffs ever went away, it would be a total disaster for the Country. It would make us financially weak, and we have to be strong.”
He added that the U.S. will not accept huge trade deficits or unfair tariffs from other countries. “If allowed to stand, this Decision would literally destroy the United States of America. At the start of this Labor Day weekend, we should all remember that TARIFFS are the best tool to help our Workers, and support Companies that produce great MADE IN AMERICA products.”
On Friday night, the U.S. attorney general confirmed that the administration would appeal the decision.
Tariffs have been a key part of President Trump’s foreign policy in his second term. They are used to put pressure on other countries and renegotiate trade deals. While they give the U.S. leverage, they have also caused uncertainty in financial markets.
The court’s ruling mainly upheld a May decision by a federal trade court in New York. It does not affect tariffs imposed under other legal rules, like Mr. Trump’s tariffs on steel and aluminum.
The ruling allows the tariffs to stay in place until October 14, giving the administration time to appeal to the US Supreme Court.
Mr. Trump justified his tariffs under the International Emergency Economic Powers Act (IEEPA), which allows the president to act during national emergencies.
The court said: “It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs. The statute neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the President’s power to impose tariffs.”
The 1977 law was usually used to impose sanctions or freeze assets. Mr. Trump was the first president to use IEEPA to impose tariffs, citing trade imbalances, declining U.S. manufacturing, and cross-border drug flows.
The ruling could cost the U.S. Treasury billions in refunds for import taxes already collected. It might also reduce a major source of revenue used to fund the One, Big, Beautiful Bill tax cuts. By July, tariff revenue reached $142 billion, more than double from the previous year.
Earlier, Mr. Trump warned that losing a court battle over tariffs could trigger a recession. On Truth Social, he wrote: “It would be 1929 all over again, a GREAT DEPRESSION!”
In another setback, a federal judge blocked efforts by the administration to fast-track deportations of migrants.
The judge, siding with immigrant rights groups, said the policy violated constitutional due process rights for migrants.
In January, the administration expanded expedited removals—previously limited to border apprehensions—to include non-citizens anywhere in the U.S. who could not prove they had been in the country for two years. This affected millions of migrants.
Judge Jia Cobb, nominated by President Joe Biden, said the policy meant that “not only non-citizens, but everyone would be at risk.” She added: “The Government could accuse you of entering unlawfully, relegate you to a bare-bones proceeding where it would ‘prove’ your unlawful entry, and then immediately remove you.”
A Homeland Security official said the ruling ignored Trump’s legal authority and added he “has a mandate to arrest and deport the worst of the worst.”
