A federal appeals court has struck down most of President Donald Trump’s global tariffs, ruling that he overstepped his authority by imposing sweeping levies on imports. The decision marks a major setback to one of the president’s signature trade weapons.
In a 7-4 ruling, the US Court of Appeals for the Federal Circuit said Trump’s “reciprocal” and “trafficking” tariffs were “unbounded in scope, amount, and duration,” declaring them unlawful and beyond presidential power.
Judges say tariffs are a core power of Congress
The Federal Circuit emphasized that the authority to impose tariffs rests with Congress, not the president. That conclusion fractured the bench: a majority struck down Trump’s tariff actions, a concurrence argued the statute allows no tariffs at all, and four judges dissented, siding with the administration.
The panel agreed Trump exceeded his powers but stopped short of blocking the levies outright. By vacating the lower court injunction and remanding the issue, the judges left the duties in place until October 14, when the ruling is set to take effect, unless overturned on appeal.
Only 11 judges participated in the case, with Judge Pauline Newman absent due to suspension, an unusual wrinkle in a ruling already testing the limits of presidential authority.
Trump warns decision would ‘literally destroy the United States’
President Trump denounced the ruling as “highly partisan” and warned that ending his tariffs would “literally destroy the United States of America,” vowing to appeal to the Supreme Court.
White House spokesman Kush Desai said the levies “remain in effect” during the appeal and the administration looks forward to “ultimate victory.”
Trump’s reliance on the International Emergency Economic Powers Act for broad import duties is unprecedented; the 1977 law is typically used for sanctions, not tariffs.
Plaintiffs called the decision a constitutional safeguard. Jeffrey Schwab, lead attorney for the Liberty Justice Center, told CNN the case was vital to provide businesses certainty on tariffs and to rein in what he described as an asserted expansion of presidential authority.
Businesses stuck between court rulings and tariff push
The ruling has left businesses in a bind: tariffs deemed unlawful by the courts are still being collected, forcing companies and consumers to absorb higher costs in the meantime.
Treasury Secretary Scott Bessent had hoped to close negotiations with trading partners by Labor Day, but TIME reported that the deadline has slipped amid the uncertainty created by the ruling.
Retailers are also passing on the strain. Walmart and Best Buy have raised prices in response to the duties, warning that further hikes could follow if the standoff drags on.
In August, Trump issued a directive imposing tariffs of up to 41% on more than 80 countries. That expansion now faces the same cloud of legal uncertainty that has been hanging over his earlier tariff actions.
Supreme Court will decide reach of presidential power
The case is now headed to the Supreme Court, with the Trump administration set to appeal. The high court will be asked to decide whether emergency powers can be stretched to cover sweeping import duties or whether that authority rests exclusively with Congress.
The appeals court’s decision to vacate the injunction sends the case back to the Court of International Trade, shifting the dispute from tariffs to constitutional limits.
However, the precedent set by the court will shape the reach of the presidency for years to come.
For millions of small packages, the rules have changed: the $800 duty-free threshold is gone, and duties now apply across the board.