Topline
A federal appeals court will hear oral arguments Thursday over whether President Donald Trump’s sweeping “Liberation Day” tariffs are legal—one day before the government’s harsher tariff rates take effect, though the court isn’t expected to rule quickly enough to stop them.
The U.S. Court of Appeals for the Federal Circuit will hold a hearing in VOS Selections, Inc. v. Trump, a lawsuit brought by small businesses that argues Trump exceeded his authority by imposing his “Liberation Day” tariffs on nearly all countries.
The Trump administration appealed a lower court ruling in the case that found the tariffs are unlawful and should be blocked, and the appeals court allowed the tariffs to take effect while it deliberates.
The plaintiffs argue Trump doesn’t have authority to impose his tariffs under the International Emergency Economic Powers Act (IEEPA), the law the president pointed to in his order on the tariffs, which gives presidents broad power to enact certain economic sanctions during national emergencies.
While Trump claims the U.S.’ trade deficits with other countries constitutes an emergency that justifies invoking the law, the businesses argue IEEPA doesn’t give the president any power to impose tariffs—and even if it did, the trade deficits are not a qualifying emergency.
Appeals court judges will decide whether they agree with the Court of International Trade, which ruled in May that Trump can’t impose tariffs under IEEPA and “any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional.”
The court will hear arguments Thursday but is not expected to issue a decision from the bench, so any decision over the tariffs’ legality is most likely to come after Friday, when the Trump administration’s pause on the worst of its “Liberation Day” tariffs is set to expire.
In a Truth Social post on Thursday morning, Trump wrote: “To all of my great lawyers who have fought so hard to save our Country, good luck in America’s big case today. If our Country was not able to protect itself by using TARIFFS AGAINST TARIFFS, WE WOULD BE ‘DEAD,’ WITH NO CHANCE OF SURVIVAL OR SUCCESS.”
It’s unclear how long it will take the appeals court to rule in the case, and whether or not it will agree with the Court of International Trade and block the tariffs. The tariffs will remain in effect in the meantime. Bloomberg previously noted the Federal Circuit has historically been deferential to presidents on tariffs in the past, though it remains to be seen whether that will be the case this time. The VOS Selections case is also one of several lawsuits over the “Liberation Day” tariffs that are still pending in court, along with other lawsuits brought by companies and Democratic state attorneys general. One of those lawsuits, Learning Resources Inc. v. Trump, has also resulted in a court ruling finding Trump’s tariffs likely unlawful, though an appeals court has similarly let the tariffs stay in effect for now.
Legal experts have long expected it will ultimately be up to the Supreme Court to determine the legality of Trump’s tariffs, and whichever party the appeals court rules against is likely to ask the high court to take up the case. The businesses that brought the Learning Resources lawsuit have already asked the Supreme Court to hear their case—even before the appeals court can rule on it—asking justices in June to hear the case on an expedited basis as soon as the court’s term begins in the fall, or even sooner. The Supreme Court rejected that request, but that doesn’t mean justices won’t agree to hear that lawsuit or any other tariff disputes in the future.
Trump’s full “Liberation Day” tariffs are scheduled to take effect Friday, after the president initially paused the worst of the tariffs back in April. The higher rate only briefly took effect on April 9, with Trump pausing it hours later after the stock market plunged and leaving only a baseline 10% rate in effect. The president has vigorously defended his tariffs, which have become the centerpiece of his economic agenda despite concerns from economists that they could raise prices for consumers and harm the economy. The Trump administration has tried to reach trade deals during the pause, but while agreements with some major trading partners like the European Union and Japan have been announced, the government failed to reach the “90 deals in 90 days” that officials had initially promised. Trump ultimately imposed new tariff rates on some countries, rather than reaching negotiated deals, and officials have suggested other countries may just go back to the tariff rate Trump initially imposed in April when the pause expires. The pause was initially supposed to end in early July, but Trump extended it until Aug. 1 as his administration scrambled to reach last-minute deals. It remains to be seen whether the pause could be extended again, or if a second pause could be announced after the tariffs take effect. Trump’s history of flip-flopping on tariffs has made critics skeptical they’ll take effect and markets have so far not plunged like they did in April, as Wall Street has dubbed the president “TACO Trump” for “Trump always chickens out” on tariffs. Trump has so far insisted his tariffs will take effect Friday as planned, however, writing on Truth Social on Wednesday that the Aug. 1 deadline “stands strong, and will not be extended.”