A US court has ruled that most of President Donald Trump’s recently imposed tariffs are illegal, the second such ruling in four months.
The US Court of Appeals for the Federal Circuit voted in a 7-4 ruling Friday that the law Trump used to invoke the levies, the International Emergency Economic Powers Act (IEEPA), does not authorize the president to place those duties on imports. The ruling backs up a May decision of the US Court of International Trade, which another court has since overturned.
Instead, it is Congress that has the right to impose tariffs, the appeals court stated.
“The core congressional power to impose taxes such as tariffs is vested exclusively in the legislative branch by the constitution; when Congress delegates this power…it does so clearly and unambiguously,” the court explained. “Taxation is a legislative function, and Congress…is the sole organ for levying taxes. It would be…a sharp break with our traditions to conclude that Congress had bestowed on the executive branch the taxing power.”
The court’s decision will go into effect on October 14 to allow Trump time to appeal to the Supreme Court for a reversal.
“All tariffs are still in effect!” Trump wrote on Truth Social following the decision. “Today a highly partisan appeals court incorrectly said that our tariffs should be removed, but they know the US will win in the end. If these tariffs ever went away, it would be a total disaster for the country…. If allowed to stand, this decision would literally destroy the United States of America.”
Since April, Trump has levied reciprocal duties on most countries, ranging from 10% to 50% on nations including India, which manufactures 90% of the world’s diamonds. This sent the trade into turmoil. Industry bodies have been working on getting Trump’s administration to exclude diamonds from tariffs.
Meanwhile, responding to the latest court ruling, the National Retail Federation (NRF) said the “tug-of-war between the courts, the administration and the Congress” was harming the retail industry.
“Tariffs have created significant disruption to the retail supply chain, resulting in increased costs for retailers large and small,” explained vice president of supply chain and customs policy Jonathan Gold. “The ongoing instability threatens economic growth and will ultimately, and most certainly, result in higher prices for goods and services to be paid by American consumers. Retailers need certainty, and we look forward to the case being settled by the Supreme Court.”
Image: Shipping containers blocked by US tariffs. (Shutterstock)
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