The US Court of International Trade (CIT) ruled in May 2025 that President Donald Trump's reciprocal tariffs constituted an "overreach" infringing on Congress's authority. On July 31, both sides presented oral arguments before a federal appeals court. Less than a month later, the appeals court issued a ruling declaring most of Trump's global tariff policies "illegal."
The appeals court stated that the International Emergency Economic Powers Act (IEEPA) does not explicitly grant the US president the power to impose tariffs, and that Trump's invocation of this law to levy tariffs exceeded presidential authority.
Although invalidated, these tariffs will remain in effect until October 14 to allow the US Supreme Court time to review the case. Whether the Supreme Court accepts the case and its potential timeline for hearing it will be a key factor determining the ultimate fate of these tariff measures.
According to reports from CNN, Fox News, and BBC, the appeals court halted tariffs imposed under IEEPA, including the April 2 announcement of "reciprocal tariffs" as well as those aimed at curbing fentanyl-related imports.
However, "industrial tariffs" on automobiles, steel, and aluminum were not included in this ruling.
The Trump administration has recently accelerated the implementation of industrial tariffs based on Section 232 investigations, intending to "fill the gap" should the judicial system block the reciprocal tariffs.
According to the Trump administration, the tariffs generate significant revenue for the US, but the unilateral imposition of taxes using emergency powers also infringes upon Congress's core authority.
Investment bank Jefferies states that the tariff case could reach the Supreme Court in early 2026 at the earliest. At that point, justices will face a difficult balancing act between supporting presidential administrative power and safeguarding US interests.
During the oral arguments at the appeals court, the government's claim of broad tariff authority faced skepticism from judges. Key figures responsible for enforcing tariffs within Trump's cabinet—including Secretary of the Treasury Scott Bessent, Secretary of Commerce Howard Lutnick, and Secretary of State Marco Rubio—vigorously defended the policy before the court.
They recently asserted that invalidating the tariffs would overturn months of negotiation achievements between the US and the European Union (EU), Japan, South Korea, and other countries.
Bessent stated that the president's ability to swiftly impose tariffs deters immediate retaliatory actions by other nations, warning that halting the tariffs' effectiveness would expose the US to retaliation risks.
Lutnick stressed that the tariffs forced foreign trade partners to the negotiating table "in ways that no other president came close to achieving" and that an adverse ruling would "send a signal to the world that the US lacks the resolve to defend its own economic and national security."
Rubio added that Trump invoked IEEPA authority during sensitive negotiations related to the Ukraine war, claiming that an unfavorable court ruling against Trump's tariff policy could severely impact ongoing peace talks between Russia and Ukraine as well as human rights issues.
Article edited by Jack Wu
