A divided U.S. appeals court has ruled that most of President Donald Trump's tariffs are unconstitutional, prompting him to denounce the decision as "highly partisan" while economists stressed that the ruling limits executive power but does not eliminate tariffs altogether.
Appeals Court Strikes Down Tariffs, Allows Supreme Court Appeal
In a 7-4 decision on Friday, the U.S. Court of Appeals for the Federal Circuit said Trump overstepped his authority by using the International Emergency Economic Powers Act to impose sweeping tariffs, reported Reuters.
The court noted that IEEPA, historically used for sanctions and asset freezes, does not explicitly grant the president authority to levy tariffs.
The tariffs, which Trump introduced in February and April against China, Canada and Mexico, will remain in place through Oct. 14 while his administration appeals to the Supreme Court.
"The statute bestows significant authority on the President… but none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax," the court wrote.
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Trump Calls Ruling A ';Total Disaster'
Trump blasted the decision on Truth Social, warning that removing tariffs would "literally destroy the United States of America" and vowing to fight back.
"ALL TARIFFS ARE STILL IN EFFECT! … Now, with the help of the United States Supreme Court, we will use them to the benefit of our Nation, and Make America Rich, Strong, and Powerful Again!"
Peter Schiff Says He Already Predicted This, Justin Wolfers Explains Why No Ban
Economist Justin Wolfers said the ruling was about process, not prohibition. "It does not ban tariffs. It simply says that you have to convince Congress," Wolfers said.
Peter Schiff, who had predicted the outcome, shared an earlier post saying importers could seek refunds and Trump could use the ruling as "another scapegoat--alongside [Fed Chair Jerome] Powell and [Former President Joe] Biden--for the coming recession," adding, "I told you so."
The Political And Market Fallout
Governor Gavin Newsom (D-Calif) appeared to be celebrating the ruling. He took to X, formerly Twitter, and said, "Donald Trump LOSES big time in court. Would be very terrible if this went viral!"
Hedge fund manager Spencer Hakimian suggested conservative justices could "save the country" when the case reaches the Supreme Court.
Trade analysts said the administration anticipated this outcome and may use other legal tools to keep tariffs in place. Markets showed little immediate reaction, but strategists warned of rising uncertainty, the report noted.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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