Appeals Court Rules Against Some Trump Administration Tariffs, Including Broad Penalties On Canada And Mexico

In a 7-4 decision on Friday, Aug. 29, the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. ruled some of President Donald Trump’s tariffs are illegal. The decision will not take effect until Oct. 14, however, in order to give the Trump administration the opportunity to ask the Supreme Court to rule on the matter. (The administration will appeal the lower court’s ruling, which means it will be up to the highest court in the land to determine the scope of presidential authority over tariffs. If the Supreme Court rules against the Trump administration, it could require refunds of collected duties, which have already totaled $159 billion this year.)

The judges’ ruling applies to the tariffs President Trump has imposed under the International Emergency Economic Powers Act (IEEPA). Those penalties are:

• The baseline 10 percent tariffs imposed on almost all U.S. trading partners;
• Reciprocal tariffs imposed on several dozen countries; and
• Tariffs imposed on Canada, China, and Mexico in an attempt to address the flow of illegal drugs into the United States.

The ruling does not apply to the Section 232 tariffs the Trump administration has imposed on industrial metals products and other goods. It also does not apply to tariffs imposed under Section 301 of the Trade Act of 1974. Regarding the IEEPA, the court said, “The statute bestows significant authority on the president to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax.”

The decision upholds a ruling issued this past May by the U.S. Court of International Trade, which found President Trump’s use of the IEEPA to impose tariffs violated the U.S. Constitution because only Congress has the power to impose taxes and tariffs.