Well, this changes things! An appeals court just dropped a bombshell, ruling that most of Donald Trump’s signature tariffs were actually illegal. This decision could reshape future presidential economic powers and global trade relations. What does this mean for the future of US foreign policy?

A significant legal blow has been dealt to former President Donald Trump’s economic policies, as a federal appeals court recently ruled that many of his imposed tariffs were illegal, effectively challenging a cornerstone of his international trade strategy.

The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., found that the legal authority Trump cited, the International Emergency Economic Powers Act (IEEPA), did not grant him the power to levy such taxes. This judicial challenge undermines the use of Trump Tariffs as a key tool in his presidential toolkit, though the court granted a reprieve until October 14th to allow for a potential Supreme Court appeal.

During his presidency, Trump transformed tariffs into a central pillar of American foreign policy, employing them to exert pressure on trading partners and renegotiate various trade agreements. This strategy, aimed at securing economic concessions, simultaneously introduced considerable volatility into global financial markets, sparking widespread Trade Disputes.

Central to the Appeals Court Ruling was the finding that while IEEPA bestows broad authority on the President during national emergencies, it does not explicitly grant the power to impose tariffs or duties. The court emphasized that such a significant power would require clear statutory language and procedural safeguards, which were notably absent from the 1977 law.

The decision specifically addressed the legality of what Trump termed ‘reciprocal’ tariffs from his April trade war, alongside separate duties implemented in February against economic giants like China, Canada, and Mexico. These were justified by the Trump administration under IEEPA’s emergency provisions, which authorize a president to ‘regulate’ or even block imports.

Historically, the IEEPA legislation had been employed for imposing sanctions on adversarial nations or freezing assets, not for broad tariff imposition. Trump was the first president to utilize IEEPA in this manner, asserting that trade imbalances, a decline in U.S. manufacturing, and the cross-border flow of illicit drugs justified these extraordinary International Economic Policy measures.

Trump’s declaration of a national emergency in April, citing persistent trade deficits undermining manufacturing and military readiness, underpinned many of these tariff decisions. Similarly, the February tariffs against China, Canada, and Mexico were linked to claims of insufficient action against illegal fentanyl—assertions these countries vehemently denied. These declarations highlight the complex interplay of security, economic, and Presidential Power considerations.

The Legal Challenges to these policies have been numerous, with the appeals court consolidating cases brought by several U.S. businesses and Democratic-led states. Notably, prior to this federal circuit decision, the New York-based U.S. Court of International Trade had also ruled against Trump’s tariff policies in May, indicating a consistent judicial scrutiny of the executive’s overreach in tariff imposition.