A federal appeals court ruled on Friday that many of President Trump’s most punishing tariffs are illegal, delivering a major new setback to the administration that may severely undercut its primary source of leverage in an expanding global trade war.
The ruling, from the U.S. Court of Appeals for the Federal Circuit, affirmed a lower court’s finding that Mr. Trump does not possess unlimited power under the law to impose taxes on nearly all U.S. imports. But the appellate judges delayed the implementation of their order until October to grant the administration time to seek review by the Supreme Court, which would allow Mr. Trump to keep his contested duties in place for now.
At the heart of the fight is the extent to which Mr. Trump may invoke a decades-old economic emergency law to issue withering tariffs on the nation’s foremost trading partners. The law does not mention tariffs, but the president has seized on the statute to apply vast new duties anyway, aiming to remake U.S. trade relationships and raise billions of dollars in revenue.
Mr. Trump’s claims to sweeping trade power immediately drew legal challenges from small businesses and states, which said they were harmed financially by taxes on foreign goods that the president had no right to impose. In May, a federal trade court agreed, invalidating many of the president’s duties on grounds that the law did not grant him “unbounded authority” to wage his global trade war.
The Trump administration quickly appealed, and the court allowed the president to maintain his tariffs while the judges considered the legality of Mr. Trump’s actions. That opened the door for the White House to expand its use of tariffs this month — with a new slate of duties targeting more than 90 countries — even before appellate judges could rule.
The ruling implicates the tariffs that Mr. Trump had applied under the International Economic Emergency Powers Act, known as IEEPA, including some of his toughest duties on China, Canada and Mexico, as well as the new and steep rates the president announced on other countries this month.
No president before Mr. Trump had invoked the economic emergency law to tax imports. Without it, the White House could still issue tariffs, but they would be severely limited in their scope and duration.
The court ruling does not affect the specific rates that the president has applied to foreign vehicles, steel and other goods, which Mr. Trump imposed under a separate law that allows him to tax imports on national security grounds.
Tony Romm is a reporter covering economic policy and the Trump administration for The Times, based in Washington.
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