Court finds Trump's tariffs an illegal use of emergency power, but
leaves them in place for now
[August 30, 2025]
By PAUL WISEMAN and LINDSAY WHITEHURST
WASHINGTON (AP) — A federal appeals court ruled Friday that President
Donald Trump had no legal right to impose sweeping tariffs on almost
every country on earth but left in place for now his effort to build a
protectionist wall around the American economy.
The ruling from the U.S. Court of Appeals for the Federal Circuit found
Trump overstepped his authority under an emergency powers law, a major
legal blow that largely upheld a May decision by a specialized federal
trade court in New York.
“It seems unlikely that Congress intended to … grant the President
unlimited authority to impose tariffs,” the judges wrote in a 7-4
ruling.
But they did not strike down the tariffs immediately, allowing his
administration until mid-October to appeal to the Supreme Court.
The president vowed to do just that. “If allowed to stand, this Decision
would literally destroy the United States of America,” Trump wrote on
his social media platform.
White House spokesman Kush Desai said Trump had acted lawfully, and “we
look forward to ultimate victory on this matter.”
An attorney for small businesses affected by the tariffs, meanwhile,
said the ruling shows Trump doesn't have unlimited power to impose
tariffs on his own. “This decision protects American businesses and
consumers from the uncertainty and harm caused by these unlawful
tariffs,” said Jeffrey Schwab, director of litigation at the Liberty
Justice Center.
Still, it remains unclear whether businesses will see any effects from
the decision, said National Foreign Trade Council President Jake Colvin.
“If these tariffs are ultimately struck down, it ought to serve as a
wake up call for Congress to reclaim its constitutional mandate to
regulate duties and bring some long-term certainty for U.S. businesses
and relief for consumers,” Colvin said.
Democratic Sen. Ron Wyden of Oregon said he plans to force votes on
“repealing these harmful, regressive taxes at every opportunity.”
Putting pressure on allies
The ruling complicates Trump’s ambitions to upend decades of American
trade policy completely on his own. Trump has alternative laws for
imposing import taxes, but they would limit the speed and severity with
which he could act. His tariffs — and the erratic way he’s rolled them
out — have shaken global markets, alienated U.S. trading partners and
allies and raised fears of higher prices and slower economic growth.
But he’s also used the levies to pressure the European Union, Japan and
other countries into accepting one-sided trade deals and to bring tens
of billions of dollars into the federal Treasury to help pay for the
massive tax cuts he signed into law July 4.
“The administration could lose a pillar of its negotiating strategy,”
Ashley Akers, senior counsel at the Holland & Knight law firm and a
former Justice Department trial lawyer, said before the appeals court
decision.
A dissent from the judges who disagreed with Friday’s ruling clears a
possible legal path for Trump, concluding that the 1977 law allowing for
emergency actions “is not an unconstitutional delegation of legislative
authority under the Supreme Court’s decisions,” which have allowed the
legislature to grant some tariff authorities to the president.
The government has argued that if the tariffs are struck down, it might
have to refund some of the import taxes that it’s collected, delivering
a financial blow to the U.S. Treasury.
Revenue from tariffs now totals $159 billion, more than double what it
was at the same point the year before. Indeed, the Justice Department
warned in a legal filing this month that revoking the tariffs could mean
“financial ruin" for the United States.
“For all the tariffs that have been collected under IEEPA, you’re going
to see folks request refunds and more refunds,” said trade attorney Ryan
Majerus, a partner at King & Spalding and a former White House economic
adviser.
Attorney General Pam Bondi, meanwhile, accused the judges of interfering
with the president's central role in foreign policy and vowed to appeal.
What tariffs are in question
The ruling involves two sets of import taxes, both of which Trump
justified by declaring a national emergency under the 1977 International
Emergency Economic Powers Act (IEEPA):
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President Donald Trump speaks during a cabinet meeting, Tuesday,
Aug. 26, 2025, at the White House in Washington. (AP Photo/Mark
Schiefelbein)
— The sweeping tariffs he announced April 2 — “Liberation Day,” he
called it — when he imposed “reciprocal” tariffs of up to 50% on
countries with which the United States runs trade deficits and a
“baseline” 10% tariff on just about everyone else. Those tariff
rates have since been revised by Trump, in some cases after trade
negotiations, and generally went into effect Aug. 7.
The national emergency underlying the tariffs, Trump said, was the
long-running gap between what the U.S. sells and what it buys from
the rest of the world. The president started to levy modified tariff
rates in August, but goods from countries with which the U.S. runs a
surplus also face the taxes.
— The “trafficking tariffs” he announced Feb. 1 on imports from
Canada, China and Mexico and later refined. These were designed to
get those countries to do more to stop what he declared a national
emergency: the illegal flow of drugs and immigrants across their
borders into the United States. The Constitution gives Congress the
power to impose taxes, including tariffs. But over the decades,
lawmakers have ceded authority to the president, and Trump has made
the most of the power vacuum.
But Trump’s assertion that IEEPA essentially gives him unlimited
power to tax imports quickly drew legal challenges — at least seven
cases. No president had ever used the law to justify tariffs, though
IEEPA had been used frequently to impose export restrictions and
other sanctions on U.S. adversaries such as Iran and North Korea.
The plaintiffs argued that the emergency power law does not
authorize the use of tariffs.
They also noted that the trade deficit hardly meets the definition
of an “unusual and extraordinary” threat that would justify
declaring an emergency under the law. The United States, after all,
has run trade deficits — in which it buys more from foreign
countries than it sells them — for 49 straight years and in good
times and bad.
Emergency powers
The Trump administration argued that courts approved President
Richard Nixon’s emergency use of tariffs in a 1971 economic crisis
that arose from the chaos that followed his decision to end a policy
linking the U.S. dollar to the price of gold. The Nixon
administration successfully cited its authority under the 1917
Trading With the Enemy Act, which preceded and supplied some of the
legal language used in IEEPA.
In May, the U.S. Court of International Trade in New York rejected
the argument, ruling that Trump’s Liberation Day tariffs “exceed any
authority granted to the President” under the emergency powers law.
In reaching its decision, the trade court combined two challenges —
one by five businesses and one by 12 U.S. states — into a single
case.
In the case of the drug trafficking and immigration tariffs on
Canada, China and Mexico, the trade court ruled that the levies did
not meet IEEPA’s requirement that they “deal with” the problem they
were supposed to address.
The court challenge does not cover other Trump tariffs, including
levies on foreign steel, aluminum and autos that the president
imposed after Commerce Department investigations concluded that
those imports were threats to U.S. national security.
Nor does it include tariffs that Trump imposed on China in his first
term — and President Joe Biden kept — after a government
investigation concluded that the Chinese used unfair practices to
give their own technology firms an edge over rivals from the United
States and other Western countries.
Trump could potentially cite alternative authorities to impose
import taxes, though they are more limited. Section 122 of the Trade
Act of 1974, for instance, allows the president to tax imports from
countries with which the U.S. runs big trade deficits at 15% for 150
days.
Likewise, Section 301 of the same 1974 law allows the president to
tax imports from countries found to have engaged in unfair trade
practices after an investigation by the Office of the U.S. Trade
Representative. Trump used Section 301 authority to launch his
first-term trade war with China.
___
Associated Press writers Mark Sherman and Josh Boak contributed to
this story.
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