US tariffs could be voided from mid-October following court ruling

Over the course of 2025, US President Donald Trump has used emergency economic powers under the International Emergency Economic Powers Act of 1977 (IEEPA) to impose numerous tariffs on US trading partners without congressional approval.

In May, the US Court of International Trade (CIT) found that Trump’s use of the emergency powers to impose tariffs had been unauthorised under US law. The US administration appealed this decision, keeping the tariffs in place as the case went through the courts.

On Friday (EDT), the US Court of Appeals for the Federal Circuit upheld the trade court ruling, affirming that the tariffs were illegal.

In a 7-4 ruling, the appeals court found that while IEEPA bestowed significant presidential powers to respond to emergencies, it did not explicitly include the power to impose tariffs or duties.

“We affirm the CIT’s holding that the Trafficking and Reciprocal Tariffs imposed by the Challenged Executive Orders exceed the authority delegated to the President by IEEPA’s text,” court documents read.

“We also affirm the CIT’s grant of declaratory relief that the orders are ‘invalid as contrary to law’.”

The ruling has thrown Trump’s tariff regime into uncertainty. It could render US tariffs void from 14 October, unless the US administration is successful in appealing the decision in the US Supreme Court.

US Treasury Secretary Scott Bessent told Reuters said he expected the Republican-leaning Supreme Court to rule in support of the tariffs. He said he would prepare a legal brief on the matter for the US Solicitor General, who would oversee the government’s Supreme Court appeal.

Last Friday, the appeals court largely focused on the wording of the IEEPA Act to determine whether the emergency powers explicitly included the authority to impose tariffs.

“The Government locates that authority within the term ‘regulate . . . importation,’ but it is far from plain that ‘regulate . . . importation,’ in this context, includes the power to impose the tariffs at issue in this case,” court documents read.

“Notably, when drafting IEEPA, Congress did not use the term ‘tariff’ or any of its synonyms.”

The appeals court noted that other statutes that delegate the president's power to impose tariffs used “clear and precise” language to delegate tariff power.

“None of these statutes uses the broad term 'regulate' without also separately and explicitly granting the President the authority to impose tariffs,” court documents read.

“The absence of any such tariff language in IEEPA contrasts with statutes where Congress has affirmatively granted such power and included clear limits on that power.”

Court documents also highlighted the unusual nature of Trump’s tariff regime, noting that he had declared several national emergencies since taking office to justify the imposition of sweeping tariffs.

“For many years, Congress has carefully constructed tariff schedules which provide for, in great detail, the tariffs to be imposed on particular goods,” court documents read.

“Since taking office, President Donald J. Trump has declared several national emergencies. In response to these declared emergencies, the President has departed from the established tariff schedules and imposed varying tariffs of unlimited duration on imports of nearly all goods from nearly every country with which the United States conducts trade.”

On April 2, also known as ‘Liberation Day’, Trump invoked IEEPA powers to tariff almost every country in the world. To justify the use of emergency powers, he declared that US trade deficits posed an “unusual and extraordinary” threat to the US.

Trump similarly used IEEPA powers to impose tariffs on Mexico, Canada and China, justifying them by declaring a “national emergency” stemming from the cross-border flow of fentanyl.

In May, the trade court determined that the IEEPA provision did not authorise Trump to impose whatever tariff rate he deemed desirable.

“Any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional,” court documents read.

The court warned that the Trump administration’s interpretation of the emergency powers made them “trivially easy” to invoke.

“If ‘deal with’ can mean ‘impose a burden until someone else deals with,’ then everything is permitted,” the court said.

“It means a President may use IEEPA to take whatever actions he chooses simply by declaring them ‘pressure’ or ‘leverage’ tactics that will elicit a third party’s response to an unconnected ‘threat.’”