A federal appeals court in Washington, D.C., handed a huge defeat to Donald Trump’s tariff policies on Friday. The court found that almost all of these tariffs violate the statutory authority of the President. The court found that Trump’s tariffs are “unbounded in scope, amount and duration,” exceeding the authority granted to the president under U.S. law. The ruling invalidates the ability of Trump and others to legitimize his tariffs as within the authority of the president. It does signal the strong possibility that the Supreme Court will eventually weigh in on this issue.
The court’s ruling flows directly from Trump’s argument. We know this because he keeps saying that he has the authority to do so under the International Emergency Economic Powers Act (IEEPA). This act allows the president to control or prohibit foreign transactions as long as there is a declared national emergency. The court ruled that Trump’s tariffs “exceed any authority granted to the president,” stating that the IEEPA does not explicitly mention tariffs.
Most importantly, though, the court emphasized throughout its analysis that while acknowledging the IEEPA provides no explicit tariff language. This is in sharp contrast to other statutes where Congress has clearly delegated that authority and provided definite bounds. One judge remarked that “the absence of any such tariff language in IEEPA contrasts with statutes where Congress has affirmatively granted such power and included clear limits on that power.” In addition, it would be hard to believe that Congress meant to give the president free-reign to enact tariffs on anything and everything.
The previous administration used a variety of national emergencies to impose these tariffs. These should have included our trade deficits with foreign partners, the fentanyl trafficking crisis, and immigration. However, the court found these justifications inadequate. The ruling highlights the legal limits on the president’s powers to re-write trade policy.
On July 31, the court heard oral arguments for this very case. In a rare move, it ordered that ruling to avoid being effective until October 14. This unwieldy timeline creates space for numerous appeals to come. We want the Supreme Court to rule that Trump’s actions – no matter how unthinkable, unprecedented or repulsive – were not legally justified during his presidency.
The economic implications of Trump’s tariffs have been significant, triggering uncertainty in both domestic and international markets and fueling fears of rising inflation. Critics say this policy, among others, have done more harm than good. They harm America’s trade relations and increase prices for American consumers.
Following the ruling, Trump took to social media to express his discontent, stating, “If allowed to stand, this Decision would literally destroy the United States of America.” His statements are consistent with his underlying perpetual defense of tariffs as a patriotic saving force to defend American personnel and industries. He previously stated, “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.”
The court’s ruling is set to have a monumental impact on the future of U.S. trade policy. Legal experts are saying this is a huge precedent. It could set the precedent for the limits of presidential powers in issuing tariffs and trade rules. As discussions continue about the ruling’s implications, stakeholders in the economy will be closely monitoring any developments as they unfold.