Federal Appeals Court Strikes Down Trump-Era Tariffs—Reins in Presidential Power Over Trade

A major federal court ruling is redefining the limits of presidential power—and the ripple effects could be felt far beyond trade.

In a 7–4 en banc decision, the U.S. Court of Appeals for the Federal Circuit ruled that former President Donald Trump violated federal law when he used emergency powers to impose broad tariffs on imports from dozens of countries, including Mexico, Canada, and China. The court held that the International Emergency Economic Powers Act (IEEPA)—a Cold War-era statute meant to address foreign threats—does not authorize the president to impose tariffs or taxes on imported goods.

The Background: Emergency Powers Meet Trade Policy

Between January and April 2025, Trump issued a series of executive orders invoking IEEPA to justify new tariffs as high as 125% on nearly all goods from key U.S. trading partners. His administration framed the measures as necessary responses to cross-border drug trafficking and trade imbalances, declaring national emergencies tied to Mexico, China, and Canada.

The lawsuit—V.O.S. Selections, Inc. v. Trump—was brought by a coalition of small businesses and 12 states. They challenged what they called an unlawful and unconstitutional expansion of executive power.

The Court’s Ruling: No Blanket Tariff Authority

The Federal Circuit agreed, finding that IEEPA allows the president to regulate importation in narrow ways—like freezing transactions or blocking goods linked to foreign adversaries—but not to rewrite tariff schedules or impose new duties without congressional approval. In short, regulating imports is not the same as taxing them.

The court emphasized that:

• Tariffs are taxes, and the Constitution gives Congress, not the president, the power to tax.

  
  

• The president’s actions had “vast economic and political significance,” triggering the major questions doctrine, which demands clear and specific authorization from Congress before such power can be used.

• IEEPA contains no such authorization for imposing tariffs, and the executive orders went far beyond what Congress intended.

Implications: A Test of Executive Power

This decision could reshape how emergency powers are understood and applied across federal law. It limits the scope of unilateral action presidents can take under IEEPA—whether on trade, sanctions, or beyond. The ruling underscores a growing judicial skepticism toward “executive overreach” when sweeping economic measures are taken without congressional involvement.

What Comes Next?

While the tariffs remain temporarily in place under a stay, the Trump administration is expected to appeal the decision to the U.S. Supreme Court. If the ruling stands, it could invalidate billions in duties and signal a shift back toward stronger congressional control over trade and taxation policy.

Bottom Line:

This isn’t just a trade dispute—it’s a constitutional moment. At stake is how far presidents can go when invoking emergency powers—and whether those powers stop at the nation’s wallet.