A U.S. federal appeals court has ruled that most of Donald Trump’s sweeping tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), are illegal. While the court did not order their immediate removal, the decision sets the stage for a Supreme Court review, marking a major test of presidential authority in trade policy and a clear setback for Trump’s aggressive tariff agenda.
Court’s Ruling and Its Scope
On August 29, 2025, the U.S. Court of Appeals for the Federal Circuit concluded that Trump exceeded his power under IEEPA by declaring national emergencies to justify broad tariffs on nearly every country. The judges stated that the law grants the president significant authority to regulate commerce during true emergencies, but not the power to impose tariffs, which constitutionally belongs to Congress. Trump’s “Liberation Day” tariffs (10% baseline on all imports, up to 50% on countries with trade deficits) and similar duties on China, Mexico, and Canada were found to be beyond legal limits. However, the court allowed these tariffs to remain until October 14, 2025, to give the administration time to appeal to the Supreme Court.
What Tariffs Are Affected?
The ruling covers the “reciprocal” tariffs and other broad-based duties implemented in Trump’s second term under IEEPA, including the recent 25%-50% tariffs on India and extra levies on Russian oil imports. It does not affect earlier tariffs on steel, aluminum, autos, or certain China-specific measures implemented under separate commerce laws, such as the Trade Expansion Act of 1962 or the Trade Act of 1974, which allow for sectoral or time-limited tariffs after investigation.
Basis of the Judgment
The court found that neither trade deficits nor the drug crisis are valid national emergencies that justify sweeping economic action. It stated that Congress has never explicitly delegated the power to impose tariffs through IEEPA, and any instances of tariff authority must be clearly and narrowly defined by legislation. This judgment is consistent with the U.S. Constitution’s assignment of tariff and tax powers to the legislative branch, not the executive. Four dissenting judges argued that the law’s broad language could support Trump’s view, indicating a possible Supreme Court opening.
What Happens Next?
For now, the tariffs remain in place. Trump vowed to challenge the decision in the Supreme Court, warning that removing them could weaken the United States financially and undermine its bargaining position with trading partners. If upheld, the ruling would require the government to consider refunding billions in collected tariffs and lose leverage for future trade negotiations. However, Trump and future presidents could still use other, more limited, laws to impose sectoral tariffs for defined periods or after formal investigations—though the power would be narrower and subject to clearer checks.
Global and Indian Impact
If the Supreme Court strikes down Trump’s national-emergency tariffs, it will benefit exporters from countries like India by reducing broad-based duties. However, sectoral tariffs—especially on steel, aluminum, or IT hardware—could still be imposed under different statutes, meaning Indian exporters remain at risk from targeted trade actions if investigations justify them.
In summary, the appeals court’s ruling is a pivotal moment for presidential trade powers: tariffs imposed on broad emergency grounds are likely to end unless the Supreme Court overturns, while selective, statutory tariffs may persist. This litigation will shape the future of how the U.S. wields trade as a tool of geopolitics.
