Court Ruling Unmasks Trump Tariff Power Grab

A federal appeals court has declared the majority of Donald Trump’s tariffs on imports to the United States as unlawful, challenging the legal basis of a key economic policy from his second term. The 7-4 ruling, issued by the U.S. Court of Appeals for the Federal Circuit, concluded that Trump exceeded his authority by invoking the International Emergency Economic Powers Act (IEEPA) to impose the tariffs, which the court deemed to be outside the scope of the law’s intended use [1]. The decision aligns with a prior ruling by the U.S. Court of International Trade, which also found Trump’s tariffs to be beyond the limits of the IEEPA [1].

The court highlighted that tariffs are typically a legislative responsibility, not an executive power, and that the IEEPA does not explicitly authorize the president to impose tariffs or duties [1]. The decision specifically targeted Trump’s “reciprocal tariffs” announced in April 2024, as well as “trafficking tariffs” introduced in February 2024 against China, Canada, and Mexico, which were justified under the guise of combating drug trafficking [1]. These measures were criticized for their broad scope, high rates, and indefinite duration, creating uncertainty for businesses and trading partners.

Despite the ruling, Trump has stated that all tariffs remain in place for now, pending a potential appeal to the U.S. Supreme Court, with the current legal deadline set for October 14 [1]. In response, Trump defended his tariffs as essential for protecting American jobs and curbing unfair trade practices, calling the ruling “highly partisan” and warning of economic catastrophe should the tariffs be removed [1]. The administration has signaled intent to challenge the decision at the highest court in the land, raising further uncertainty over the future of these policies.

The ruling has also sparked speculation about its broader economic implications, particularly in sectors like cryptocurrency. While the U.S. stock markets were closed for the Labor Day weekend following the ruling, the cryptocurrency market—operating 24/7—was exposed to the news immediately [2]. Some analysts suggest that if the court’s decision stands and fewer tariffs lead to reduced global economic pressure, risk assets like Bitcoin could see a long-term boost. Lower tariffs may enhance economic recovery and liquidity, indirectly supporting crypto prices [2]. However, experts note that Bitcoin is not directly affected by tariffs, as it operates outside the scope of traditional trade taxation [2].

The uncertainty surrounding the tariffs has already created volatility in business planning and trade negotiations, with Trump’s policies frequently shifting and complicating strategies for companies operating in global markets [3]. The ruling adds another layer of unpredictability, potentially increasing market anxiety. While August saw gains in U.S. equities, historical trends suggest that September could present challenges if trade policy remains in flux [3]. Investors are now closely monitoring whether the Supreme Court will uphold the Trump administration’s position or side with the appeals court.

The court’s decision is one of several legal challenges targeting Trump’s use of the IEEPA for trade policy, underscoring a broader debate over the limits of executive authority in economic matters. As the legal battle unfolds, the impact on the economy, international trade relations, and even financial markets will depend on the ultimate outcome of the appeal process.

Source:

[1] A Court Ruled Trump's Tariffs Illegal. Here's What's Next (https://time.com/7313524/trump-tariffs-illegal-court-ieepa/)

[2] US Court Rules Trump Tariffs Illegal: What's Next for ... (https://cryptopotato.com/us-court-rules-trump-tariffs-illegal-whats-next-for-bitcoins-price/)

[3] Tariff uncertainty intensifies with the U.S. court's ruling (https://www.cnbc.com/2025/09/01/cnbc-daily-open-tariff-uncertainty-intensifies-with-the-us-courts-ruling.html)