A 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 decided on Friday that it was against the law for Mr Trump to use emergency powers to impose import taxes on other countries by himself.
The 7-4 decision raises questions about trade deals the president made with the European Union, Japan, South Korea, and other major trading partners to lower tariffs from the levels set on April’s Liberation Day.
It also puts into doubt tariffs Mr Trump placed on China, Canada, and Mexico to pressure them to stop the flow of fentanyl into the United States.
The court explained: “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 also said the US will not accept huge trade deficits and 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 US attorney general confirmed the administration plans to appeal the decision.
Tariffs have been a major part of President Trump’s foreign policy in his second term, helping him push other countries to renegotiate trade deals. While they have given the US more leverage in trade, they have also unsettled financial markets.
The court’s decision, which mostly agreed with a May ruling by a federal trade court in New York, does not affect tariffs issued through other legal methods, such as Mr Trump’s steel and aluminium tariffs.
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 the tariffs under the International Emergency Economic Powers Act, which lets the president respond to “unusual and extraordinary” threats during national emergencies.
“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 court said. “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 for sanctions or freezing assets. Mr Trump, the first president to use IEEPA for tariffs, argued the measures were necessary because of trade imbalances, weaker US manufacturing, and cross-border drug flows.
The ruling could hurt the US treasury financially, forcing the government to refund billions of dollars in import taxes. It could also remove a major source of income used to pay for the tax cuts in Mr Trump’s One, Big, Beautiful Bill. Revenue from tariffs had reached $142 billion by July, more than double the previous year.
Mr Trump has warned that if the ruling stands, it could trigger a recession. On Truth Social earlier this month, he said: “It would be 1929 all over again, a GREAT DEPRESSION!”
In another setback on Friday, a federal judge blocked the administration’s effort to speed up deportations of migrants.
The judge sided with immigrant rights groups, saying the policies violate the constitutional due process rights of migrants who could be arrested anywhere in the US.
In January, the Trump administration expanded an expedited removal process—previously used at the border—to include non-citizens anywhere in the US who could not prove they had been in the country for at least two years.
Judge Jia Cobb, nominated by former president Joe Biden, said this policy put “not only non-citizens, but everyone… at risk.” She explained: “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 authority and added he “has a mandate to arrest and deport the worst of the worst.”
