US appeals court rules Trump's global tariffs are unconstitutional

A US federal appeals court ruled Friday that President Donald Trump had no legal right to impose sweeping tariffs, finding that Trump overstepped his authority under an emergency powers law.

The ruling from the US Court of Appeals for the Federal Circuit, however, left them in place for now until mid-October, allowing his administration time to appeal to the Supreme Court.

Reacting to the ruling, Trump vowed to do just that. “If allowed to stand, this Decision would literally destroy the United States of America,” he wrote on his social media platform.

Friday's ruling is seen as a major legal blow that largely upheld a May decision by a specialised federal trade court in New York.

The decision also complicates Trump’s ambitions to upend decades of American trade policy completely on his own. Trump’s tariffs—and the erratic way he’s rolled them out—have shaken global markets, alienated US trading partners and allies, and raised fears of higher prices and slower economic growth.

Where does this leave Trump’s trade agenda?

The court’s decision centres on the tariffs Trump slapped in April on almost all US trading partners and the levies he imposed before that on China, Mexico, and Canada.

On what he called Liberation Day, Trump on 2 April imposed so-called reciprocal tariffs of up to 50% on countries with which the United States runs a trade deficit and 10% baseline tariffs on almost everybody else.

The US leader later suspended the reciprocal tariffs for 90 days to give countries time to negotiate trade agreements with the United States—and reduce their barriers to American exports. Some of them did—including the United Kingdom, Japan, and the European Union—and agreed to lopsided deals with Trump to avoid even bigger tariffs.

Claiming extraordinary power to act without congressional approval, Trump justified the taxes under the 1977 International Emergency Economic Powers Act by declaring the United States’ longstanding trade deficits “a national emergency.”

In February, he’d invoked the law to impose tariffs on Canada, Mexico, and China, saying that the illegal flow of immigrants and drugs across the US border amounted to a national emergency and that the three countries needed to do more to stop it.

The US Constitution gives Congress the power to set taxes, including tariffs. But lawmakers have gradually let presidents assume more power over tariffs—and Trump has made the most of it.

On Friday, the federal appeals court wrote in its 7-4 ruling that “it seems unlikely that Congress intended to ... grant the President unlimited authority to impose tariffs.”

A dissent from the judges concluded 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 tariffing authorities to the president.

However, the Trump administration could also invoke levies under a different legal authority—Section 232 of the Trade Expansion Act of 1962—as it did with tariffs on foreign steel, aluminium, and cars.

Although that will require a Commerce Department investigation, which cannot simply be imposed at the president’s own discretion.