Appeals Court Rules Trump’s Tariffs Illegal

The case was consolidated from two separate lawsuits, one filed by a dozen states and the other by five small U.S. businesses.

It is the furthest along of more than half a dozen federal lawsuits challenging Trump’s use of the International Emergency Economic Powers Act, or IEEPA, to impose sweeping tariffs.

The Trump administration has argued that IEEPA empowers the president to effectively impose country-specific tariffs at any level if he deems them necessary to address a national emergency.

The Federal Circuit quickly paused that ruling while Trump’s appeal played out. But multiple appellate judges appeared highly skeptical of the Trump administration’s arguments when they heard oral arguments in late July.

The four dissenters said they disagreed with the majority’s conclusion on the question of the tariffs’ legality.

And the dissent said the plaintiffs had not justified their argument for a summary judgment in their favor.

The appeal was considered by 11 of the 12 judges on the Federal Circuit. The twelfth judge on the court, Pauline Newman, did not participate in the case, as she has been suspended from her duties since 2023. Newman, 98, is in a long-running dispute with the court over a request that she undergo a cognitive evaluation in order to continue hearing cases.

The appeals court decision came just hours after Trump’s top trade negotiators urged the judges to consider what they called “supplemental developments” in the case, including an assessment from the Congressional Budget Office that tariffs will reduce U.S. deficits by $4 trillion over the next decade.

Striking down the tariffs Trump imposed under IEEPA “would cause massive and irreparable harm to the United States and its foreign policy and national security both now and in the future,” Commerce Secretary Howard Lutnick said in a declaration to the court.

“Such a ruling would threaten broader U.S. strategic interests at home and abroad, likely lead to retaliation and the unwinding of agreed-upon deals by foreign-trading partners, and derail critical ongoing negotiations with foreign-trading partners,” he said.