A federal appeals court has drawn a clear line for the White House, ruling that national emergency powers cannot be used as a backdoor method for setting tariff policy. The decision invalidates the legal basis for Donald Trump’s widespread “reciprocal” tariffs, which were a hallmark of his presidency.
In its ruling, the court stated that the International Emergency Economic Powers Act (IEEPA) does not contain the authority for a president to impose tariffs. The decision emphasized that the power to tax and regulate foreign commerce is a primary responsibility of Congress, and the IEEPA was not a quiet delegation of that power to the executive branch.
The verdict throws numerous international trade pacts into doubt. These agreements were negotiated by countries eager to avoid the IEEPA tariffs. The court’s finding that those tariffs were illegally imposed removes the main incentive for countries to adhere to the terms of those deals.
A legal battle at the Supreme Court is now the inevitable next step. The case will require the justices to rule on the scope of IEEPA and, more broadly, on the president’s ability to use emergency declarations to bypass the legislative process. It also opens the door to billions in potential refunds for U.S. businesses.
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