A recent decision by the U.S. Court of Appeals for the Federal Circuit has allowed President Donald Trump to continue enforcing his “Liberation Day” tariffs on imports from several U.S. trading partners, including Canada, China, and Mexico. This ruling extends a previous decision, which came after a lower court declared the tariffs an overreach of presidential authority on May 28.
The appeals court’s decision means the tariffs will remain in effect while ongoing appeals are processed. The court has yet to determine if the tariffs align with the International Emergency Economic Powers Act (IEEPA), which President Trump used to justify the tariffs. Historically, IEEPA has been utilized for imposing sanctions or freezing assets during national emergencies, making President Trump the first to apply it for setting tariffs.
The implementation of these tariffs has caused significant market disruptions, affecting businesses’ supply chains, production, staffing, and pricing strategies. The ruling does not affect other tariffs instituted under conventional legal frameworks, such as those on steel and aluminum imports.
The initial challenge to the tariffs came from a three-judge panel of the U.S. Court of International Trade, which argued that the U.S. Constitution grants Congress the exclusive power to levy taxes and tariffs. The Trump administration quickly appealed this decision, resulting in the Federal Circuit’s temporary hold on the lower court’s ruling.
The legal battle includes lawsuits by the Liberty Justice Center representing small U.S. businesses and separate filings by 12 states. These parties claim the tariffs were an inappropriate response to issues like illegal fentanyl trafficking and the U.S. trade deficit. Multiple court cases across the nation have also contested the tariffs under the emergency economic powers act, with no court yet supporting the extensive tariff authority claimed by President Trump.
