A US federal appeals court has ruled that former President Donald Trump exceeded his authority when he imposed sweeping tariffs on nearly all US trading partners, dealing a significant blow to his trade agenda.

The US Court of Appeals for the Federal Circuit said in a 7–4 decision on Friday that Trump had no legal basis to use emergency powers to levy broad tariffs on imports. The ruling upheld a lower court decision from May but left the tariffs in place until mid-October, giving Trump’s legal team time to appeal to the Supreme Court.

Reacting to the decision, Trump vowed to fight on. “If allowed to stand, this Decision would literally destroy the United States of America,” he wrote on his social media platform.

The case centres on Trump’s actions in April, when he declared longstanding US trade deficits a “national emergency” and imposed reciprocal tariffs of up to 50% on countries with which the United States runs trade deficits, and a 10% baseline tariff on nearly all others. Earlier, in February, Trump had invoked the same emergency powers to place tariffs on China, Mexico, and Canada, citing concerns over illegal immigration and drug trafficking across the US border.

While several nations—including the UK, Japan, and the European Union—struck trade deals with Washington to avoid harsher penalties, many others were hit with levies that disrupted supply chains and rattled financial markets. Economists and lawmakers alike have warned that Trump’s approach risks higher prices for consumers, trade retaliation, and slower economic growth.

At the heart of the ruling is the 1977 International Emergency Economic Powers Act (IEEPA), which Trump used to justify his unilateral tariffs. While Congress has delegated some authority over tariffs to the executive branch, the court concluded that it was unlikely lawmakers intended to grant presidents unlimited powers to set trade duties.

“The Constitution gives Congress the power to set taxes, including tariffs,” the ruling stated, adding that Trump’s interpretation of the law risked undermining that principle.

Not all judges agreed. A dissent argued that the law does not unconstitutionally delegate legislative authority, noting past Supreme Court decisions that upheld presidential discretion in specific trade matters.

The ruling leaves open the possibility that Trump could pursue tariffs under other legal frameworks, such as Section 232 of the Trade Expansion Act of 1962, which allows duties on imports tied to national security concerns. However, such measures would require a Commerce Department investigation and cannot be imposed at the president’s discretion alone.

For now, the tariffs remain in effect, but the legal setback raises fresh questions about Trump’s ability to unilaterally reshape US trade policy. With the Supreme Court appeal looming, the outcome could have sweeping consequences for America’s economic relations and the limits of presidential power.