US Appeals Court Blows Hole in Trump Tariff Strategy

A federal appeals court ruled in a 7–4 decision that most of President Trump’s global tariffs were illegal, concluding that the 1977 International Emergency Economic Powers Act (IEEPA) doesn’t give a president the authority to slap broad import duties on trading partners. The court left the tariffs in place until October 14, 2025 to give the administration time to seek Supreme Court review—so the practical status quo holds for a few weeks, but the legal foundation is cracked. 

What the ruling actually says

At the core, the judges said IEEPA lets presidents address emergencies by regulating transactions—not by imposing across-the-board tariffs, which look much more like taxing authority reserved to Congress. That’s why the court upheld a lower-court ruling (from the Court of International Trade) that had already said the IEEPA tariffs overreached.

Importantly, the decision targets Trump’s sweeping “reciprocal” tariffs and other IEEPA-based measures—but not everything bearing the “tariff” label. Steel and aluminum duties imposed under separate laws (like Section 232) are not directly affected by this ruling.

What stays—for now

Even though the appeals court found the tariffs unlawful, it stayed its own decision until Oct. 14, 2025, so companies must keep paying unless and until the Supreme Court says otherwise (or the administration changes course). The panel also pointed to unresolved questions about refunds—i.e., whether repayments would go only to plaintiffs or more broadly—which could be hashed out later in the lower court.

Why the timing matters

The stay buys the administration time to petition the Supreme Court, where the justices will be asked to answer a big separation-of-powers question: Can a president use emergency powers to unilaterally set tariffs? Meanwhile, businesses still face the same landed-cost math they did last week. Expect continued price and inventory planning based on existing rates through mid-October, at least.

If you run supply chains or set prices, here’s the practical takeaway

• Short term (through Oct. 14): Assume today’s tariff rates still apply to purchase orders and pricing. Build contingency plans for a potential rate change (or chaos) if the Supreme Court declines to intervene.

• Medium term: Watch for whether the administration pivots to other statutes (e.g., Section 301/232) to preserve parts of the policy—even if IEEPA is off the table.

• Retroactivity risk: Keep an eye on the refund question. If the courts decide collections must be paid back broadly, it could create rebate scenarios—and compliance work—to reclaim duties already paid.

For Further Reading:

1. Reuters: “Most Trump tariffs are not legal, US appeals court rules” — Aug. 29/30, 2025
   https://www.reuters.com/legal/government/most-trump-tariffs-are-not-legal-us-appeals-court-rules-2025-08-29/Reuters

2. Washington Post explainer: “An appeals court said Trump couldn’t levy his tariffs. What happens now?” — Aug. 30, 2025
   https://www.washingtonpost.com/business/2025/08/30/trump-tariffs-court-ruling-explained/ The Washington Post

3. AP News: “Appeals court knocked Trump’s tariffs down. Here’s what’s in and what’s next.” — Aug. 30, 2025
   https://apnews.com/article/trump-tariffs-court-ruling-trade-1c5a02ad38597c3629eff5977490813a AP News

4. The Guardian: “Most of Trump’s tariffs are illegal, federal court rules” — Aug. 29/30, 2025
   https://www.theguardian.com/us-news/2025/aug/29/trump-tariffs-illegal-appeal-court-ruling The Guardian

5. Axios: “Appellate court upholds order striking down most Trump tariffs” — Aug. 29, 2025
   https://www.axios.com/2025/08/29/trump-tariffs-ruling-ieepa Axios

6. CNBC: “Most Trump tariffs ruled illegal by appeals court” — Aug. 30, 2025
   https://www.cnbc.com/2025/08/30/trump-trade-tariffs-appeals.html (user-provided link)