Implications of Recent Ruling on Trump's Tariffs: What Lies Ahead?

Tue Oct 21 2025 03:24:20 GMT+0300 (Eastern European Summer Time)

A recent federal appeals court ruling deemed most of Donald Trump's tariffs as illegal. This decision has major implications for U.S. trade policy and could potentially reshape the economic landscape as it heads to the Supreme Court.

A federal appeals court ruled Donald Trump's tariffs illegal, citing an overreach of emergency powers under the International Emergency Economic Powers Act (IEEPA). The ruling requires the administration to appeal to the Supreme Court by mid-October, with significant ramifications for U.S. trade and economy. Businesses and countries are left in uncertainty as they await a decision about whether tariffs will remain in effect or be revoked altogether.

Implications of Recent Ruling on Trump's Tariffs: What Lies Ahead?

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.

This 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.

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.

The decades-old IEEPA grants a US president significant authority to respond to a national emergency or a major threat from overseas. However, the appellate court stated it did not authorize broad powers to impose tariffs.

The federal appeals court ruling could have immediate economic implications, potentially affecting financial markets and international trade dynamics.

The case is poised to proceed to the Supreme Court, where the conservative majority could lean favorably toward Trump's administration.

If the Supreme Court affirms the decision, it could heighten uncertainty in financial markets and raise questions about billions in revenue collected from import taxes.

For now, businesses and international partners wait anxiously as the legal battle unfolds, with the tariffs remaining effective until mid-October unless challenged successfully.