U.S. Court of Appeals for the Federal Circuit affirms that President Trump lacks authority to impose widespread tariffs under the emergency powers law.
In a decisive 7-4 ruling, the U.S. Court of Appeals for the Federal Circuit affirmed Friday that President Donald Trump exceeded his statutory authority when he imposed sweeping tariffs on nearly all goods from virtually every country in the world under the International Emergency Economic Powers Act (IEEPA).
The decision upheld a lower court’s determination that Trump’s use of emergency powers to implement what he termed “reciprocal tariffs” and anti-trafficking tariffs was not authorized by federal law.
The ruling addresses two major categories of tariffs implemented by the Trump administration in 2025. The first set, dubbed “trafficking tariffs,” imposed 25% duties on Canada and Mexico and varying rates on China, ostensibly to combat fentanyl smuggling and drug trafficking. The second group, known as “reciprocal tariffs,” established baseline 10% duties on imports from nearly every trading partner, with additional country-specific tariffs ranging from 11% to 50% based on bilateral trade deficits.
Together, these measures affected an estimated $4 trillion in annual imports and were projected to generate between $2.3 trillion and $3.3 trillion in government revenue over the budget window. That revenue would be paid by the American consumer, who would be charged more after the importing party paid the tariff.
The Federal Circuit’s majority opinion centered on whether IEEPA’s grant of authority to “regulate” imports encompasses the power to impose tariffs. Writing for the court, the judges concluded that while IEEPA provides broad emergency powers, the statute’s language does not clearly authorize the type of unlimited tariff authority Trump claimed.
The decision emphasized the constitutional principle that tariff-setting authority belongs fundamentally to Congress under Article I, Section 8, which grants the legislative branch exclusive power to “lay and collect Taxes, Duties, Imposts and Excises”. The court noted that when Congress delegates such core legislative powers, it must do so with clear and unambiguous language, a standard the majority found IEEPA failed to meet.
The court extensively analyzed the 1975 case United States v. Yoshida International, in which a predecessor court upheld President Nixon’s temporary 10% import surcharge under the Trading with the Enemy Act (TWEA), IEEPA’s predecessor statute. However, the Federal Circuit distinguished the current case, emphasizing that Nixon’s tariffs were explicitly temporary, limited in scope, and capped by existing congressional tariff rates, constraints absent from Trump’s measures.
Four judges dissented from the majority opinion, arguing that IEEPA’s broad language in the foreign affairs context should be interpreted to include tariff authority, particularly given the national security rationales cited by the administration.
The Federal Circuit delayed implementation of its ruling until October 14, 2025, ensuring that the Trump administration will petition the Supreme Court for review.
