Last week, the United States Court of Appeals for the Federal Circuit affirmed a very important ruling by the U.S. Court of International Trade that President Donald Trump’s reciprocal tariffs, global and across the board, are unconstitutional. 

In V.O.S. Selections v. Trump, the Trade Court ruled that Trump unlawfully used emergency powers under the International Emergency Economic Powers Act, to impose across the board tariffs of unlimited duration and against almost all imported goods from almost all nations. To illustrate the expansive nature of Trump’s global tariffs, the reciprocal tariffs were set to affect roughly 69% of U.S. goods imports. If struck down, remaining constitutional tariffs would impact only around 16% of goods imports. 

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The Appeals Court said that the Act does give the president the power to respond to “unusual and extraordinary” threats at times of national emergencies. But the Act never uses the word “tariff” or a synonym of the word tariff, such as tax or duty. 

The Court of Appeals said Trump’s reciprocal tariffs are contrary to the provisions of the Constitution that Congress controls taxation, the power to regulate tariffs and the authority of the fiscal purse more generally. The Court’s decision applies to Trump’s “reciprocal” tariffs imposed in early April against most nations. The Appeals Court also ruled against Trump’s fentanyl trafficking tariffs which were imposed in February against China, Canada and Mexico. 

The Appeals Court’s decision does not apply to tariffs imposed under Section 232 of the Trade Expansion Act of 1962. Where certain sectors of the economy are important to national security. Congress has delegated to the president the power to impose tariffs on imports of goods such as steel, aluminum, semiconductors, and drugs. The decision also does not apply to already existing tariffs placed against China under Section 301 of the Trade Act of 1974. These tariffs are designed to counter unfair trade practices. 

In its opinion, the Court of Appeals went to great lengths to explain why the Trade Court ruling was correct. The Court of Appeals emphasized that during the original Constitutional Convention, Patrick Henry asked how the proposed constitution would ensure that the country would not, in time, have a king. James Madison, the principal architect of the Constitution, responded by saying Congress would have the power of the purse. Only Congress would have the power to tax. Without access to revenues, no person would be able to become king. 

Denying Trump the power to impose tariffs without restraint denies him the power of the purse. The decision limits Trump’s overtly authoritarian tendencies. 

This tariff matter is obviously a “major question” of national importance. The United States Supreme Court articulated in West Virginia v. EPA that Congress can only delegate major powers through clear Congressional authorization. There is no clear legislative authority to impose global reciprocal tariffs or fentanyl tariffs. 

While the Court of Appeals struck down the tariffs, it left them in place until Oct. 14, to enable the administration to appeal the decision to the Supreme Court. Trump has stated that his administration will appeal. Almost certainly, the Supreme Court will be the ultimate authority on these tariffs.

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Because the majority of the Justices of the Supreme Court are ‘originalists’ who look to the original clear language of the Constitution when making judicial decisions, it is probable that the Supreme Court will affirm the Court of Appeals decision. The U.S. Constitution grants the power to lay and collect taxes and tariffs, or import duties, exclusively to Congress under Article I, Section 8, which also grants Congress the power to regulate foreign commerce. 

While Congress can delegate some tariff-setting authority to the President through legislation, the fundamental power remains with Congress. The decision by the Appeals Court is thus to be welcomed.

James Rogan is a former U.S. foreign service officer who has worked in finance and law for 30 years. He writes a daily note on the markets, politics, and society. He can be followed on X and reached at [email protected].