A federal appeals court has ruled that most of Donald Trump's tariffs are an overreach of his use of emergency powers as president.
The so-called reciprocal tariffs - imposed on nearly every country the US trades with - are being illegally imposed, the US Court of Appeals said on Friday.
The decision upholds a ruling in May from the Court of International Trade, which also rejected Trump's argument that his global tariffs were permitted under an emergency economic powers act.
Many of the tariffs that would be affected by the ruling stem from an announcement in April of a flat 10% rate on imports from all countries, which Trump said would even out unfair trade relations with the US.
The court did not halt the tariffs but instead said they would remain in place until mid-October, setting up a further legal challenge in the US Supreme Court.
In its 7-4 decision, the appellate court backed a lower court's finding that Trump did not have the authority to impose global tariffs. This was largely because of the law Trump used to justify the policies, the International Emergency Economic Powers Act (IEEPA), which the judges said did not grant the power to impose tariffs, duties, or the like, or the power to tax.
The IEEPA grants a president significant authority to respond to national emergencies. However, the court stated that it did not provide wide-ranging authority to impose tariffs.
The ruling is crucial for Trump's political legacy, as it contradicts a centerpiece of his agenda and adds uncertainty to the US economy. Moving forward, the case is expected to head to the Supreme Court, which may have implications for future governmental powers related to trade policy.
