Despite the rebuke from the Federal Circuit, the ruling is not a complete defeat for the president.

As expected, a federal appeals court has invalidated President Trump’s massive tariff regime. The ruling, however, is not a complete defeat for the president, his predictably over-the-top reaction notwithstanding. The appeals court also conclusively vacated the injunction against the tariffs that had been imposed by the lower court. In essence, the matter is on hold until mid-October. Since the administration will appeal to the Supreme Court, which is highly likely to take the case, the tariffs will probably remain in effect until the Court renders a decision – perhaps not until early next summer.

U.S. Court of Appeals for the Federal Circuit issued its decision on Friday evening. In large part, it upheld the May 28, 2025, ruling of the U.S. Court of International Trade (CIT). The Circuit had heard the case en banc, and its decision was divided, 7-4. Even within the majority, there was division.

The main ruling, issued as a per curiam opinion (i.e., by the entire majority, with no single judge identified as author), held that the Trump tariffs are illegal, even if one assumes – as at least three majority judges do – that presidents might have some modest tariff authority under the 1977 International Emergency Economic Powers Act (IEEPA), the statutory source relied on by President Trump. In a separate opinion written by Judge Tiffany P. Cunningham, a Biden appointee, four judges argued that the IEEPA gave Trump no tariff authority. Four other judges joined the dissenting opinion, written by Judge Richard G. Taranto, an Obama appointee, which essentially accepted the administration’s theory that the IEEPA’s grant to presidents of authority to “regulate” imports during an emergency included the power to impose tariffs or duties. (Contrary to the president’s above-linked X post, the Circuit is not “Highly Partisan” – judges appointed by both Republican and Democratic presidents joined in each of the court’s opinions.)

“Tariffs are a tax[.]” That is the straightforward assertion in the majority opinion that will most grate on the president. Though it is patently true, the administration has adamantly denied that the president’s tariffs are one of the largest tax increases in American history, ludicrously insisting that they are charges paid by foreign governments – to the tune of trillions of dollars over the next decade, by which Trump claims he will dramatically reduce the national debt.

To the contrary, the Trump tariff taxes are paid by importers – American companies and consumers. That includes the small businesses that joined several states in bringing the lawsuits that were consolidated for decision by the Circuit.

On the surface, it’s a simple case. The Constitution vests in Congress the power to tax, including the power to impose tariffs and duties. The text of the IEEPA does not include “tariffs” or “duties” in the the concededly broad authorities it delegates to presidents.

To the extent the Trump administration counters that Congress granted tariff authority in the IEEPA by delegating the power to regulate imports, the majority rejected that claim on three grounds.

First, taxation is one of Congress’s most important powers. Hence, the majority would not assume Congress delegated it unless it had said so clearly, yet Congress didn’t mention tariffs at all.

Second, there are several statutes in which Congress has delegated to the president and the executive branch modest tariff authority (in terms of the amount and duration of tariffs), to be invoked only after the relevant agencies go through extensive processes of investigation, notice, and negotiation. Ergo, it is inconceivable that Congress intended in the IEEPA – a statute, again, that does not mention tariffs – to grant the president carte blanche to impose any tariff at any time in any amount with no preliminary process.

Finally, the administration’s argument in favor of massive, limitless tariff power collides with the Supreme Court’s major questions doctrine. It provides that if the executive branch claims a delegation of power that will have dramatic impact on the economy, there must be a convincing demonstration that Congress unambiguously conferred that power. On that score, the majority noted that imports, at $4 trillion annually, account for 14 percent of the nation’s economy; this dwarfs the economic impact at issue in prior cases in which the Supreme Court’s invoked the major question doctrine to nullify agency actions. (See op. 37 & n.18, comparing Alabama Ass’n of Realtors v. HHS (2021), which involved $50 billion in economic impact, and Biden v. Nebraska (2023), which involved between $469 billion and $519 billion.)

The Trump tariff case, however, is not that simple.

The IEEPA has a predecessor statute, the Trading with the Enemy Act (TWEA). In the IEEPA’s nearly half-century on the books, no president prior to Trump had ever used it as a predicate to impose tariffs. Yet, President Nixon did invoke the TWEA in 1971 to impose tariffs, in order to deal with a balance-of-payments deficit. (In such a deficit, the amount of money flowing into the country is less than that flowing out; as the majority explained, this can disrupt a country’s ability to finance its international transactions (Op. 16 & n.9).)

In Yoshida Int’l v. United States (1975), a case heavily relied on by the Trump administration (and known as “Yoshida II”) Federal Circuit’s predecessor court (the Court of Customs and Patent Appeals) upheld the Nixon surcharge. It reasoned that Nixon’s tariff was was modest, temporary, and cabined by other tariff rates enacted by Congress.

There is a good argument that the Nixon tariffs are not solid precedent for the Trump tariffs. It is not enough to say they were imposed under a different statute; the IEEPA was actually meant to curb some of the executive abuses of the TWEA. And since Yoshida II was decided shortly before the IEEPA was enacted, Congress’s omission of tariffs from the list of emergency authorities the IEEPA endowed in the president is significant.

Nevertheless, the majority did not believe it needed to go so far as ruling that presidents may never impose tariffs under the IEEPA. Instead, the majority ruled that, to the extent there is IEEPA tariff authority, it must be extremely limited – in duration, amount, and deference to other congressional tariff provisions. Obviously, the Trump statutes do not meet that standard, so the majority had no trouble invalidating them.

The four judges from the majority who joined Judge Cunningham’s concurrence would have gone further and held that Yoshida II does not support presidential tariff authority under the IEEPA. The dissent, by contrast, sees Yoshida II as vibrant support, and in light of that history, construes the IEEPA’s grant of regulatory authority in emergency circumstances as comfortably embracing tariff authority.

While the Supreme Court’s recent major questions jurisprudence hurt the administration’s cause, the president was helped markedly by the Court’s decision just two months ago in Trump v. CASA, Inc.(June 27, 2025). CASA stayed lower court injunctions against the president’s executive action against birthright citizenship, and the Court reasoned that universal injunctions (often called “nationwide” injunctions) likely exceed the equitable authority Congress has given to federal courts.

Relying on CASA, the Circuit majority vacated the universal injunction granted by the CIT and remanded the case for further consideration of a more narrow injunction (presumably benefitting only the parties in the case).

The Federal Circuit had previously stayed the CIT’s injunction while it considered the case. (See my June 14 column, disagreeing with that decision.) Given that the case is now going to be appealed to the Supreme Court, we should assume that the injunction continue to be held in abeyance until the justices render their decision, probably sometime next year.

That is to say, the tariffs will remain in effect for the foreseeable future, as will the president’s ability (and apparent intention) to continue imposing and modifying tariffs. Of course, the rulings by the Federal Circuit and CIT may persuade other countries to harden their positions in trade negotiations with the Trump administration, confident that the tariffs will eventually be invalidated, conclusively, by the Supreme Court.