On August 29, 2025, the U.S. Court of Appeals for the Federal Circuit ruled in a 7–4 decision that most of former President Donald Trump’s tariffs imposed under the International Emergency Economic Powers Act (IEEPA) are illegal. The ruling upheld a May 2025 judgment by the U.S. Court of International Trade, which found Trump had exceeded his authority by using the IEEPA to declare national emergencies and impose sweeping tariffs. The court emphasized that tariff authority is a core Congressional power, not one that can be broadly delegated to the president without explicit limits.

The decision, however, is stayed until October 14, 2025, keeping the tariffs in effect while the administration appeals to the Supreme Court.

Trump made tariffs central to his second-term economic policy. In February 2025, citing the fentanyl crisis, he imposed duties on China, Canada, and Mexico under IEEPA. By April, he expanded this to “reciprocal tariffs”: a 10% baseline levy on most imports and up to 50% on dozens of partners, including the EU, Japan, and South Korea. The measures generated an estimated $107 billion in duties in just five months.

The Federal Circuit ruled that IEEPA, enacted in 1977, grants presidents authority to regulate transactions during emergencies but does not permit blanket tariffs. Applying the major questions doctrine, the majority deemed Trump’s actions “unheralded” and “transformative,” requiring clear congressional authorization.

If upheld, the ruling could invalidate billions in collected tariffs, spark repayment claims, and undermine Trump’s leverage in trade negotiations. While unaffected tariffs under Section 232 remain, the case raises deep constitutional questions over presidential power in trade.

The administration vows to fight on, with Trump calling the ruling partisan and warning of economic collapse. The Supreme Court will now determine whether his tariff strategy survives.