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Executive power

Trump Suffers Biggest Defeat Yet to Tariff Policies, Federal Appeals Court Rules

Strategic Insights

— 2 min read

A federal appeals court has delivered a significant blow to President Donald Trump's tariff policies, ruling that he overstepped his presidential powers in enacting punitive financial measures against almost every country in the world. In a 7-4 ruling, the Washington DC court found that the International Emergency Economic Powers Act (IEEPA) does not grant the president unlimited authority to impose tariffs. The ruling means the ultimate decision on the legality of Trump's tariffs will probably be made by the US supreme court.

The decision centers on the tariffs Trump introduced on April 2, which set a 10% baseline on virtually all of the US's trading partners. The court voided all those tariffs, finding them "unbounded in scope, amount, and duration." The ruling has significant implications for Trump's trade agenda, which has been marred by controversy and economic uncertainty. The decision could also put the US treasury at risk of having to refund billions of dollars in import taxes.

Key Takeaways:

  • The federal appeals court ruled that Trump's tariffs on 2 April were illegal, voiding all tariffs set by the president.
  • The court found that the International Emergency Economic Powers Act (IEEPA) does not grant the president unlimited authority to impose tariffs.
  • The ruling centers on the tariffs introduced by Trump on 2 April, which set a 10% baseline on virtually all of the US's trading partners.
  • The court said the tariffs "assert an expansive authority that is beyond the express limitations" of the law used to pass them.
  • The decision has significant implications for Trump's trade agenda, which has been marred by controversy and economic uncertainty.
  • The ruling could also put the US treasury at risk of having to refund billions of dollars in import taxes.

Statistics:

  • Revenue from tariffs totaled $159bn by July, more than double what it was at the same point last year (Source: Justice department).
  • The court ruled that the tariffs "assert an expansive authority that is beyond the express limitations" of the law used to pass them (Source: Federal appeals court).
  • The Washington DC court's decision centers on the tariffs introduced by Trump on 2 April, which set a 10% baseline on virtually all of the US's trading partners (Source: White House).
  • The court found that the International Emergency Economic Powers Act (IEEPA) does not grant the president unlimited authority to impose tariffs (Source: Federal appeals court).

Sources:

  • Adam Gabbatt, Dominic Rushe, and agencies (The Guardian).
  • White House ( official government sources).
  • Justice department (official government sources).
  • Federal appeals court ( official court sources).

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