Source: Cailian
According to Central TV News, on August 29, local time, the U.S. Court of Appeal ruled that most of the global tariff policies implemented by U.S. President Trump were illegal.
It is reported that the U.S. Court of Appeals for the Federal Circuit voted 7-4 on Friday to uphold the previous ruling of the International Trade Court, finding that the International Emergency Economic Powers Act (IEEPA) did not explicitly give the U.S. President the power to impose tariffs, and Trump invoked the law to impose tariffs beyond his authority.
The ruling is the biggest blow yet to tariffs, one of the signature policies of Mr. Trump's second term, and could set the stage for the administration to eventually take the case to the Supreme Court, where the appeals court has allowed the tariffs to remain in place until mid-October so that the court can hear the case.
The majority opinion of the Court of Appeal stated that "the International Emergency Economic Powers Act gives the President significant powers to take a series of actions in response to a declared national emergency, but none of these actions explicitly includes the power to impose tariffs, taxes or similar taxes." The court pointed out that the word "tariff" does not appear in IEEPA, nor do synonyms such as "tax" and "tariff" appear.
Previously, on May 28 local time, the U.S. Court of International Trade issued an important ruling, unanimously finding that the global tariff policy announced by the Trump administration on April 2 "Liberation Day" exceeded its legal authority. The legal basis applied to the policy of imposing additional tariffs on products from Canada, Mexico and China (the so-called "fentanyl tariff") is also wrong, and the ruling will prohibit the implementation of the above tariff measures.
In April this year, Trump imposed so-called reciprocal tariffs on almost all U.S. trading partners, which he called "Liberation Day," a move that sparked days of market chaos and dissatisfaction from foreign governments, and prompted Trump to temporarily suspend the implementation of many tariffs to negotiate with dozens of foreign governments. The revised tariff rates took effect in early August, but the Trump administration's negotiations with many countries are continuing.
However, it is worth noting that although the Federal Circuit Court of Appeals ruled that most of the global tariff policies implemented by Trump were illegal, it also cited a Supreme Court legal precedent widely seen as favorable to Trump in its ruling, sending the case back to the 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 said the court needed to consider whether its decision was consistent with the Supreme Court's ban on issuing "general injunctions", meaning judges cannot make decisions that go beyond the parties in the case and apply nationwide to the United States.
How will things play out next?
Overall, Friday's ruling by the Federal Circuit Court may prolong the suspense about whether Trump's tariffs will ultimately be maintained.
The case was originally expected to be submitted to the Supreme Court for a final ruling, but the Trump administration now has two options: it can appeal directly to the Supreme Court, which has previously supported Trump on other issues several times; it can also have the International Trade Court first review the case to determine its scope.
Trump tweeted on his social media platform Truth Social shortly after the ruling was released, saying “All tariffs remain in force!”
Trump said,"Today, a partisan appeals court wrongly said that our tariffs should be eliminated, but they knew that the United States would win in the end. If these tariffs are really eliminated, it will be a complete disaster for the country."
White House spokesman Kush Desai said in a statement, "President Trump legally exercised the tariff power given to him by Congress to defend our national and economic security from foreign threats. The president's tariffs are still valid, and we look forward to the final victory of this matter."
In response, industry insiders said that global trade worth trillions of dollars is currently being involved in this legal dispute. If the Supreme Bill finally rules to revoke Trump's tariffs, his much-hyped trade deals will fail completely. The U.S. government will also be forced to respond to requests for refunds of paid tariffs.
It is worth mentioning that on the eve of the above ruling, the chief lawyer of the Trump administration sent a letter to the Court of Appeal warning that if the president lost the case, it would lead to "catastrophic consequences", citing the Trump administration's previous trade agreements with the European Union, Indonesia, the Philippines and Japan. They argued that the ruling should be stayed even if the court quashes the tariffs.
"Our country will not be able to repay the trillions of dollars that other countries have promised to pay, which may lead to financial collapse," the letter reads. "The president believes that forced dissolution of the agreement may trigger catastrophic consequences similar to those in 1929."
U.S. Treasury Secretary Bessent said in a letter that the president’s ruling that global tariffs were illegal would seriously damage U.S. foreign policy would cause “dangerous diplomatic embarrassment.” U.S. Commerce Secretary Lutnik noted that tariffs “in a way that no other president can reach” drew foreign powers to the negotiating table. He also told the court that the adverse ruling would “send a signal to the world that the United States lacks determination to defend its economy and national security.”
In any case, if the case is eventually appealed by the Trump administration to the U.S. Supreme Court, the Supreme Court could make a historic milestone ruling in the field of tariff policy.
At the same time, while the U.S. government will still be able to maintain its existing unilateral tariff policy in the short term, the effectiveness and stability of the U.S. unilateral tariff policy will be greatly reduced if the Supreme Court eventually makes a ruling that tariffs are illegal, and the U.S. government may find it difficult to enforce similar unilateral tariffs unless it is authorized by Congress.