Legal Setback for Trump's Tariffs: Implications and Next Steps

Wed Oct 22 2025 21:48:30 GMT+0300 (Eastern European Summer Time)

A federal appeals court ruling declared Trump's tariffs illegal, raising questions about the economic and political landscape moving forward. What does this mean for the future of US trade policy?

A recent ruling by a federal appeals court has determined that the majority of Donald Trump's tariffs are illegal, citing overreach under the International Emergency Economic Powers Act. While the ruling does not immediately lift the tariffs, it sets the stage for a potential Supreme Court review. The implications for the US economy and Trump's political future are significant, as uncertainty looms over trade and legislative powers.

A federal appeals court has ruled that most of Donald Trump's tariffs are an overreach of his use of emergency powers as president.

The so-called reciprocal tariffs - imposed on nearly every country the US trades with - are being illegally imposed, the US Court of Appeals said on Friday.

The decision upholds a ruling in May from the Court of International Trade, which also rejected Trump's argument that his global tariffs were permitted under an emergency economic powers act.

Many of the tariffs that would be affected by the ruling stem from an announcement in April of a flat 10% rate on imports from all countries, which Trump said would even out 'unfair' trade relations with the US.

The court did not halt the tariffs but instead said they would remain in place until mid-October, setting up a further legal challenge in the US Supreme Court.

In its 7-4 decision, the appellate court backed a lower court's finding that Trump did not have the authority to impose global tariffs.

This was largely because of the law Trump used to justify the policies, the International Emergency Economic Powers Act (IEEPA), which the judges said did not grant 'the power to impose tariffs, duties, or the like, or the power to tax'.

The US Court of Appeals rejected Trump's argument that the tariffs were permitted under his emergency economic powers, calling the levies 'invalid as contrary to law'.

Trump immediately criticized the judgement, taking to Truth Social in the hours after it landed to call the appeals court 'highly partisan' and the ruling a 'disaster' for the country.

Outside of being a significant setback to a centerpiece of Trump's agenda, the federal appeals court ruling could have an immediate impact on the US economy, with knock-on effects felt in global markets.

The case will now most likely proceed to the highest US court, a challenge that Trump signaled on Truth Social, indicating that the tariffs were allowed to be used against the US by 'uncaring and unwise politicians,' and pledging to utilize them for the nation's benefit.

If the Supreme Court affirms the decision, it could trigger uncertainty in financial markets and affect trade relationships with various economies that had secured individual deals with the US prior to the August deadline.

The ruling may become a significant political moment for Trump, with potential ramifications on his authority as a dealmaker depending on how the Supreme Court proceeds.

As it stands, Trump's reciprocal tariffs remain in place until mid-October, leaving businesses and markets in a state of suspense surrounding the future of US trade policy.