The U.S. Court of Appeals for the Federal Circuit upheld the previous ruling of the International Trade Court on Friday with a vote of 7 to 4;
The appellate court determined that the International Emergency Economic Powers Act (IEEPA) does not explicitly grant the U.S. President the authority to impose tariffs, and that Trump's invocation of this law to impose tariffs exceeded his jurisdiction.
According to a report by CCTV News on August 29 (Editor: Xiao Xiang), on August 29 local time, the U.S. appellate court ruled that most of the global tariff policies implemented by President Trump are illegal.
It is reported that the U.S. Court of Appeals for the Federal Circuit upheld the previous ruling of the International Trade Court on Friday with a vote of 7 to 4, determining that the International Emergency Economic Powers Act (IEEPA) does not explicitly grant the U.S. President the authority to impose tariffs, and that Trump's invocation of this law to impose tariffs exceeded his jurisdiction.
This ruling represents the most significant blow to tariffs, one of the hallmark policies of Trump's second term, and may lay the groundwork for the Trump administration to ultimately appeal this case to the Supreme Court. Currently, the appellate court allows the tariff measures involved in the case to remain in effect until mid-October, so that all parties can request the Supreme Court to review the case.
The majority opinion of the appellate court stated, "The International Emergency Economic Powers Act grants the President significant authority to take a range of actions in response to declared national emergencies, but these actions do not explicitly include the power to impose tariffs, taxes, or similar levies." The court pointed out that the term "tariff" does not appear in the IEEPA, nor do synonyms like "tax" or "levy."
Previously, on May 28 local time, the U.S. International Trade Court made a significant ruling, unanimously determining that the global tariff policy announced by the Trump administration on April 2, known as "Liberation Day," exceeded its statutory authority. It also ruled that the legal basis for imposing tariffs on products from Canada, Mexico, and China (the so-called "fentanyl tariffs") was erroneous and ordered the prohibition of the enforcement of these tariff measures.
In April of this year, Trump imposed so-called reciprocal tariffs on nearly all U.S. trading partners, calling it "Liberation Day." This move triggered several days of market turmoil and dissatisfaction from foreign governments, prompting Trump to temporarily suspend many of the tariffs to negotiate with dozens of foreign governments. The amended tariff rates took effect in early August, but negotiations between the Trump administration and many countries are still ongoing.
However, it is worth mentioning that although the Federal Circuit Court ruled that most of the global tariff policies implemented by Trump are illegal, the ruling also cited a Supreme Court precedent that is widely viewed as favorable to Trump, remanding the case to a lower court to determine whether the ruling applies to all goods affected by the tariffs or only to the parties involved in the case.
The appellate court judges stated that the International Trade Court needs to consider whether its ruling aligns with the Supreme Court's decision prohibiting the issuance of "universal injunctions," meaning that judges cannot issue rulings that extend beyond the parties in the case and apply nationwide across the United States.
How will the situation develop next?
Overall, the ruling made by the Federal Circuit Court on Friday may prolong the uncertainty regarding whether Trump’s tariffs will ultimately be upheld.
The case was originally expected to be submitted to the Supreme Court for a final ruling. However, the Trump administration now has two options: it can appeal directly to the Supreme Court, which has previously supported Trump on other issues; or it can allow the International Trade Court to re-examine the case first to determine its scope of applicability.
Shortly after the ruling was announced, Trump posted on his social media platform, Truth Social, stating, "All tariffs remain in effect!"
Trump remarked, "Today, a partisan appellate court incorrectly suggested that our tariffs should be lifted, but they know the ultimate victory belongs to the United States. If these tariffs are indeed lifted, it would be a total disaster for the country."
White House spokesperson Kush Desai stated in a statement, "President Trump has lawfully exercised the tariff authority granted to him by Congress to defend our nation's and economic security against foreign threats. The President's tariffs remain in effect, and we look forward to a final victory on this matter."
Industry insiders have stated that global trade, valued at trillions of dollars, is currently embroiled in this legal dispute. If the Supreme Court ultimately rules to revoke Trump's tariffs, his widely publicized trade agreements will completely fail. The U.S. government will also be compelled to address refund requests for tariffs that have already been paid.
It is noteworthy that on the eve of the aforementioned ruling, the chief lawyer of the Trump administration sent a letter to the appellate court warning that a ruling against the president would lead to "disastrous consequences," citing previous trade agreements made by the Trump administration with the EU, Indonesia, the Philippines, and Japan. They argued that even if the court revokes the tariffs, the ruling should be stayed.
"Our country will be unable to repay the tens of trillions of dollars promised to other nations, which could lead to a fiscal collapse," the letter stated. "The president believes that forcibly terminating the agreements could trigger catastrophic consequences similar to those of 1929."
U.S. Treasury Secretary Bessent expressed in the letter that ruling the president's global tariffs illegal would severely damage U.S. foreign policy, leading to a "dangerous diplomatic embarrassment." U.S. Commerce Secretary Lutnick pointed out that the tariffs have brought foreign powers to the negotiating table "in ways no other president could achieve." He also informed the court that an adverse ruling would "send a signal to the world that the U.S. lacks the resolve to defend its economic and national security."
In any case, if this case is ultimately appealed by the Trump administration to the U.S. Supreme Court, the Court may issue a historically significant ruling in the realm of tariff policy.
At the same time, although the U.S. government can still maintain the effectiveness of its existing unilateral tariff policy in the short term, if the Supreme Court ultimately rules the tariffs illegal, the effectiveness and stability of the U.S. unilateral tariff policy will be significantly undermined, and unless enacted through separate legislation or authorization by Congress, the U.S. government may find it difficult to implement similar unilateral tariffs.
Editor/Jeffy