Released September 03, 2025 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--A federal appeals court ruled against most of President Donald Trump's tariffs last Friday, threatening a central element of his economic agenda.
In last Friday's 7-4 ruling, the U.S. Court of Appeals for the Federal Circuit upheld a unanimous lower-court ruling from the U.S. Court of International Trade, issued in May. For more on that, see May 30, 2025, article - Appeals Court Pauses Block on Trump Tariffs. The majority in the appeals court held that five of the president's executive orders issued earlier this year exceeded his authority under the law he cited, the International Emergency Economic Powers Act (IEEFA), which was enacted in 1977.
In February, President Trump issued executive orders establishing "trafficking" tariffs against China, Mexico and Canada for not doing enough to counter the illegal exports of fentanyl or its precursor chemicals to the U.S. Then, in April, he unveiled other executive orders that set "reciprocal" tariffs against nearly every other country in the world with which the U.S. has a significant trade relationship. The "reciprocal" tariffs were in response to what the president asserted were longstanding unfair trade and tariff practices maintained by its trading partners.
The Trump administration said it will appeal the appeals court's August 29 decision to the U.S. Supreme Court. In its decision, the appeals court suspended its ruling until mid-October to allow for appeals to the high court. Until the high court reaches a decision, both sets of tariffs under IEEPA will remain in effect. The appeals court case was V.O.S. Selections, Incorporated, et al, v. Donald J. Trump, in his official capacity as president of the United States.
The case did not involve targeted tariffs the president has levied against imports of steel, copper, aluminum and automobiles. Those were issued under other laws.
The decision from the U.S. Court of Appeals for the Federal Circuit, if affirmed, could be significantly more than a narrow tariff dispute. Trump administration officials have been counting on the tariffs to pay for a significant part of the cost of its "One Big Beautiful Bill" tax and budget package, passed in July. The appeals court decision noted that the Trump administration estimated that the "reciprocal" tariffs alone were expected to generate between $2.3 and $3.3 trillion over a decade. The non-partisan Congressional Budget Office in July said the bill would cost about $4.1 trillion over a decade.
Of the seven justices ruling against the president, six were appointed by Democratic presidents. Two of the four justices who dissented were appointed by Republicans and two by Democratic presidents.
The court's 127-page decision noted that IEEPA, the law invoked by President Trump as a reason for enacting these tariffs, does not contain the words tariff, tax, duty or any of its synonyms. The majority ruling also noted, "The Constitution grants Congress the power to "lay and collect Taxes, Duties, Imposts and Excises" and to "regulate Commerce with foreign Nations. Tariffs are a tax, and the Framers of the Constitution expressly contemplated the exclusive grant of taxing power to the legislative branch. ... Setting tariff policy was thus considered a core Congressional function."
The majority noted that "there are numerous statutes that do delegate to the President the power to impose tariffs; in each of these statutes ... Congress has used clear and precise terms to delegate tariff power, reciting the term 'duties' or one of its synonyms. ... The absence of any such tariff language in IEEPA contrasts with statutes where Congress has affirmatively granted such power and included clear limits on that power."
Since it was enacted in 1977, several presidents have relied on IEEFA to support executive orders, such as after the 9/11 terrorist attacks, but none had invoked it for tariff purposes.
The president used the language of IEEPA as the basis for his "reciprocal" tariffs. Quoting the law, he asserted that the large gap between the value of imported goods and exported goods constituted an "unusual and extraordinary threat ... to the national security, foreign policy or economy of the United States." He claimed that the trade gap crippled the U.S. manufacturing base, potentially rendering it unable to produce essential goods needed in a national emergency such as a war or an invasion.
However, parties opposing the president pointed out that the U.S. has routinely run a trade deficit in goods for the better part of five decades. The court it did not explicitly rule on whether the president's declaration of a national emergency did constitute an actual emergency.
President Trump lashed out at the appeals court itself and its August 29 decision in posts on his Truth Social platform. In a post before the court ruled, he wrote that an adverse court decision "would be 1929 all over again, a GREAT DEPRESSION! Without tariffs, and all of the TRILLIONS OF DOLLARS we have already taken in, our Country would be completely destroyed and our military power would be instantly obliterated." After last Friday's decision, he posted, "ALL TARIFFS ARE STILL IN EFFECT! Today a Highly Partisan Appeals Court incorrectly said that our Tariffs should be removed, but they know the United States of America will win in the end."
Between February and July, the non-partisan Tax Foundation (Washington, D.C.) calculated that the IEEPA tariffs have brought in about $133.6 billion to government coffers. In an interview broadcast on MSNBC, Treasury Secretary Scott Bessent projected those tariffs would bring in about $300 billion per year. If the Supreme Court rules against the president, those funds will have to be returned to those who paid them, a complicated process.
On August 11, prior to the appeal court's decision, senior officials at the U.S. Department of Justice, representing the president, wrote a letter to the court that warned of the dire consequences that could result from a ruling against the president.
"Suddenly revoking the president's tariff authority under IEEPA would have catastrophic consequences for our national security, foreign policy and economy," wrote U.S. Solicitor General D. John Sauer and Assistant Attorney General Brett Shumate. "The president believes that our country would not be able to pay back the trillions of dollars that other countries have already committed to pay, which could lead to financial ruin."
That letter continued: "One year ago, the United States was a dead country, and now, because of the trillions of dollars being paid by countries that have so badly abused us, America is a strong, financially viable and respected country again. If the United States were forced to pay back the trillions of dollars committed to us, America could go from strength to failure the moment such an incorrect decision took effect."
Further, the letter said it was the threat of IEEPA tariffs that allowed Trump to reach trade deals with the 27-nation European Union, "America's most significant trading partner," as well as with Indonesia, the Philippines, Japan and the United Kingdom.
Sauer and Shumate concluded, "These deals for trillions of dollars have been reached, and other countries have committed to pay massive sums of money. If the United States were forced to unwind these historic agreements, the President believes that a forced dissolution of the agreements could lead to a 1929-style result. In such a scenario, people would be forced from their homes, millions of jobs would be eliminated, hard-working Americans would lose their savings and even Social Security and Medicare could be threatened. In short, the economic consequences would be ruinous, instead of unprecedented success."
Neal Katyal, former acting U.S. Solicitor General, who in opposing Trump represented a coalition of small businesses, states and libertarian organizations, pointed out that the August 11 letter made economic and political arguments, not legal ones.
In an interview with MSNBC after the court's decision, he said, "This is a win for the Constitution. (The president) was way beyond the Constitutional pale. (The majority) said, The president under our constitution is given no power to impose tariffs. Our Founders expressly gave that to the Congress in Article 1, Section 8 (of the Constitution)."
In that interview, Katyal, a partner and head of the Supreme Court and Appellate Practice at law firm Milbank LLP (New York, New York), continued, "President Trump himself recognized (his inability to enact tariffs on his own during his first term) when he went to Congress and asked for the authority to tariff. Congress said no. In prior rulings, (the Supreme Court has said) these questions are too major for the president to decide. They have to be done by the Congress. The president on his own can't tax the American people. That's what King George III tried to do and we had a revolution about that."
Katyal was referencing the high court's "major questions doctrine," invoked several times against Trump's predecessor Joe Biden. The doctrine holds that presidential actions carrying vast economic and political consequences require a clear Congressional authorization. For more on that doctrine, see July 1, 2022, article - Supreme Court Kicks Clean Air Case Back to EPA.
The court's majority opinion said the president's "interpretation of IEEPA as providing the President power to impose unlimited tariffs also runs afoul of the major questions doctrine."
There are other laws on which the president could rely to support declaring an emergency to impose tariffs, such as Section 232 of the Trade Expansion Act of 1962, the court noted, but it added that "every Congressional delegation to the President of the core legislative power to impose tariffs includes well-defined procedural and substantive limitations."
Four justices on the appeals court dissented from the majority. They supported the president's use of tariffs as a "bargaining chip" to get Mexico, Canada and China to stop exporting fentanyl or its precursor chemicals to the U.S. It also rejected the application of the "major questions doctrine" to this case. The minority also wrote that IEEPA granted the president sufficient latitude to impose "retaliatory" tariffs.
The dissenting justices wrote, "IEEPA's language, as confirmed by its history, authorizes tariffs to regulate importation. ... IEEPA embodies an eyes-open congressional grant of broad emergency authority in this foreign-affairs realm."
Peter Navarro, the White House senior counsellor for trade and manufacturing, lashed out at the judges in the majority. Navarro, who is not a lawyer, said in an interview broadcast on Fox Business that, "This was weaponized partisan injustice at its worst, politicians in black robes. But the good news is the dissent was very, very strong. I think it provides a very clear road map to how the Supreme Court can certainly rule in our favor."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
In last Friday's 7-4 ruling, the U.S. Court of Appeals for the Federal Circuit upheld a unanimous lower-court ruling from the U.S. Court of International Trade, issued in May. For more on that, see May 30, 2025, article - Appeals Court Pauses Block on Trump Tariffs. The majority in the appeals court held that five of the president's executive orders issued earlier this year exceeded his authority under the law he cited, the International Emergency Economic Powers Act (IEEFA), which was enacted in 1977.
In February, President Trump issued executive orders establishing "trafficking" tariffs against China, Mexico and Canada for not doing enough to counter the illegal exports of fentanyl or its precursor chemicals to the U.S. Then, in April, he unveiled other executive orders that set "reciprocal" tariffs against nearly every other country in the world with which the U.S. has a significant trade relationship. The "reciprocal" tariffs were in response to what the president asserted were longstanding unfair trade and tariff practices maintained by its trading partners.
The Trump administration said it will appeal the appeals court's August 29 decision to the U.S. Supreme Court. In its decision, the appeals court suspended its ruling until mid-October to allow for appeals to the high court. Until the high court reaches a decision, both sets of tariffs under IEEPA will remain in effect. The appeals court case was V.O.S. Selections, Incorporated, et al, v. Donald J. Trump, in his official capacity as president of the United States.
The case did not involve targeted tariffs the president has levied against imports of steel, copper, aluminum and automobiles. Those were issued under other laws.
The decision from the U.S. Court of Appeals for the Federal Circuit, if affirmed, could be significantly more than a narrow tariff dispute. Trump administration officials have been counting on the tariffs to pay for a significant part of the cost of its "One Big Beautiful Bill" tax and budget package, passed in July. The appeals court decision noted that the Trump administration estimated that the "reciprocal" tariffs alone were expected to generate between $2.3 and $3.3 trillion over a decade. The non-partisan Congressional Budget Office in July said the bill would cost about $4.1 trillion over a decade.
Of the seven justices ruling against the president, six were appointed by Democratic presidents. Two of the four justices who dissented were appointed by Republicans and two by Democratic presidents.
The court's 127-page decision noted that IEEPA, the law invoked by President Trump as a reason for enacting these tariffs, does not contain the words tariff, tax, duty or any of its synonyms. The majority ruling also noted, "The Constitution grants Congress the power to "lay and collect Taxes, Duties, Imposts and Excises" and to "regulate Commerce with foreign Nations. Tariffs are a tax, and the Framers of the Constitution expressly contemplated the exclusive grant of taxing power to the legislative branch. ... Setting tariff policy was thus considered a core Congressional function."
The majority noted that "there are numerous statutes that do delegate to the President the power to impose tariffs; in each of these statutes ... Congress has used clear and precise terms to delegate tariff power, reciting the term 'duties' or one of its synonyms. ... The absence of any such tariff language in IEEPA contrasts with statutes where Congress has affirmatively granted such power and included clear limits on that power."
Since it was enacted in 1977, several presidents have relied on IEEFA to support executive orders, such as after the 9/11 terrorist attacks, but none had invoked it for tariff purposes.
The president used the language of IEEPA as the basis for his "reciprocal" tariffs. Quoting the law, he asserted that the large gap between the value of imported goods and exported goods constituted an "unusual and extraordinary threat ... to the national security, foreign policy or economy of the United States." He claimed that the trade gap crippled the U.S. manufacturing base, potentially rendering it unable to produce essential goods needed in a national emergency such as a war or an invasion.
However, parties opposing the president pointed out that the U.S. has routinely run a trade deficit in goods for the better part of five decades. The court it did not explicitly rule on whether the president's declaration of a national emergency did constitute an actual emergency.
President Trump lashed out at the appeals court itself and its August 29 decision in posts on his Truth Social platform. In a post before the court ruled, he wrote that an adverse court decision "would be 1929 all over again, a GREAT DEPRESSION! Without tariffs, and all of the TRILLIONS OF DOLLARS we have already taken in, our Country would be completely destroyed and our military power would be instantly obliterated." After last Friday's decision, he posted, "ALL TARIFFS ARE STILL IN EFFECT! Today a Highly Partisan Appeals Court incorrectly said that our Tariffs should be removed, but they know the United States of America will win in the end."
Between February and July, the non-partisan Tax Foundation (Washington, D.C.) calculated that the IEEPA tariffs have brought in about $133.6 billion to government coffers. In an interview broadcast on MSNBC, Treasury Secretary Scott Bessent projected those tariffs would bring in about $300 billion per year. If the Supreme Court rules against the president, those funds will have to be returned to those who paid them, a complicated process.
On August 11, prior to the appeal court's decision, senior officials at the U.S. Department of Justice, representing the president, wrote a letter to the court that warned of the dire consequences that could result from a ruling against the president.
"Suddenly revoking the president's tariff authority under IEEPA would have catastrophic consequences for our national security, foreign policy and economy," wrote U.S. Solicitor General D. John Sauer and Assistant Attorney General Brett Shumate. "The president believes that our country would not be able to pay back the trillions of dollars that other countries have already committed to pay, which could lead to financial ruin."
That letter continued: "One year ago, the United States was a dead country, and now, because of the trillions of dollars being paid by countries that have so badly abused us, America is a strong, financially viable and respected country again. If the United States were forced to pay back the trillions of dollars committed to us, America could go from strength to failure the moment such an incorrect decision took effect."
Further, the letter said it was the threat of IEEPA tariffs that allowed Trump to reach trade deals with the 27-nation European Union, "America's most significant trading partner," as well as with Indonesia, the Philippines, Japan and the United Kingdom.
Sauer and Shumate concluded, "These deals for trillions of dollars have been reached, and other countries have committed to pay massive sums of money. If the United States were forced to unwind these historic agreements, the President believes that a forced dissolution of the agreements could lead to a 1929-style result. In such a scenario, people would be forced from their homes, millions of jobs would be eliminated, hard-working Americans would lose their savings and even Social Security and Medicare could be threatened. In short, the economic consequences would be ruinous, instead of unprecedented success."
Neal Katyal, former acting U.S. Solicitor General, who in opposing Trump represented a coalition of small businesses, states and libertarian organizations, pointed out that the August 11 letter made economic and political arguments, not legal ones.
In an interview with MSNBC after the court's decision, he said, "This is a win for the Constitution. (The president) was way beyond the Constitutional pale. (The majority) said, The president under our constitution is given no power to impose tariffs. Our Founders expressly gave that to the Congress in Article 1, Section 8 (of the Constitution)."
In that interview, Katyal, a partner and head of the Supreme Court and Appellate Practice at law firm Milbank LLP (New York, New York), continued, "President Trump himself recognized (his inability to enact tariffs on his own during his first term) when he went to Congress and asked for the authority to tariff. Congress said no. In prior rulings, (the Supreme Court has said) these questions are too major for the president to decide. They have to be done by the Congress. The president on his own can't tax the American people. That's what King George III tried to do and we had a revolution about that."
Katyal was referencing the high court's "major questions doctrine," invoked several times against Trump's predecessor Joe Biden. The doctrine holds that presidential actions carrying vast economic and political consequences require a clear Congressional authorization. For more on that doctrine, see July 1, 2022, article - Supreme Court Kicks Clean Air Case Back to EPA.
The court's majority opinion said the president's "interpretation of IEEPA as providing the President power to impose unlimited tariffs also runs afoul of the major questions doctrine."
There are other laws on which the president could rely to support declaring an emergency to impose tariffs, such as Section 232 of the Trade Expansion Act of 1962, the court noted, but it added that "every Congressional delegation to the President of the core legislative power to impose tariffs includes well-defined procedural and substantive limitations."
Four justices on the appeals court dissented from the majority. They supported the president's use of tariffs as a "bargaining chip" to get Mexico, Canada and China to stop exporting fentanyl or its precursor chemicals to the U.S. It also rejected the application of the "major questions doctrine" to this case. The minority also wrote that IEEPA granted the president sufficient latitude to impose "retaliatory" tariffs.
The dissenting justices wrote, "IEEPA's language, as confirmed by its history, authorizes tariffs to regulate importation. ... IEEPA embodies an eyes-open congressional grant of broad emergency authority in this foreign-affairs realm."
Peter Navarro, the White House senior counsellor for trade and manufacturing, lashed out at the judges in the majority. Navarro, who is not a lawyer, said in an interview broadcast on Fox Business that, "This was weaponized partisan injustice at its worst, politicians in black robes. But the good news is the dissent was very, very strong. I think it provides a very clear road map to how the Supreme Court can certainly rule in our favor."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
