After tariff defeat in appeals court, Trump administration seeks swift Supreme Court ruling

Trump warned that if the Supreme Court rules the global tariffs illegal, America may have to “unwind” trade deals with the European Union, Japan, South Korea, and others. A loss, he said, could cause the US “to suffer so greatly.”

Last week, the US Court of Appeals for the Federal Circuit, in a 7-4 ruling, largely upheld a lower court’s finding that Trump’s tariffs exceeded presidential authority under the 1977 International Emergency Economic Powers Act (IEEPA). The court left the tariffs in place but struck down the administration’s justification for them.

The ruling followed lawsuits from states and small businesses claiming significant economic harm. In its filing, the administration warned the decision “casts a pall of uncertainty upon ongoing foreign negotiations,” reported AP, endangering trade talks and existing agreements.

“The stakes in this case could not be higher,” the government lawyers wrote.

Attorneys representing companies hit by the tariffs echoed this, saying the measures are “inflicting serious harm on small businesses and jeopardising their survival,” reported AP.

What’s at stake next

Trump has used tariffs as leverage in trade talks with the EU, Japan, Canada, Mexico, and China, arguing they are vital tools for securing better deals. While levies generated $159 billion by late August–more than double the previous year–critics say they disrupted markets, strained alliances, and raised fears of higher prices and slower growth.

The Constitution grants Congress power over tariffs, but lawmakers have long delegated authority to the executive branch. The Federal Circuit majority ruled IEEPA does not allow presidents to override Congress on tariff matters, though dissenting judges said it gives broad discretion during emergencies.

The case specifically concerns tariffs Trump announced in February and April on imports from Canada, China, and Mexico. It does not cover other measures such as steel, aluminum, or auto tariffs, nor the tariffs on Chinese goods imposed during Trump’s first term and later maintained by President Joe Biden.

Administration officials warned that if the tariffs are struck down, the government could be forced to refund billions, delivering a blow to the US Treasury.

(With inputs from AP)