The affected tariffs include those branded as “reciprocal” and those imposed earlier this year against China, Canada, and Mexico. Trump framed these levies as responses to trade imbalances and cross‑border drug trafficking, justifying them under a declared national emergency. However, the appeals court rejected that reasoning, emphasising that IEEPA grants broad emergency powers but does not sanction the use of tariffs or duties, which fall under taxation authority reserved for Congress.
Critics of the ruling warn of broader ramifications. One expert described the decision as putting the administration’s entire economic strategy on an unprecedented collision course with the Supreme Court, particularly amid ongoing disputes over executive authority and central bank independence. Meanwhile, market strategists voiced concerns over heightened trade policy uncertainty and its potential impact on businesses and investors.
Trump, undeterred, denounced the decision as evidence of judicial bias, calling the court “highly partisan” and predicting a favourable outcome from the Supreme Court. He warned that any rollback of the tariffs would be “a total disaster for the country,” reiterating that the measures underpin efforts to safeguard domestic industry and employment.
The legal and political reverberations are stark. Legal commentators note that while other tariff schemes grounded in Section 232 or Section 301 of trade legislation remain unaffected, this ruling casts doubt on the executive branch’s ability to circumvent Congress using emergency powers. At the United States Court of International Trade in New York, a three‑judge panel had already ruled in May that the tariffs violated IEEPA and should be vacated—rulings that have been stayed pending appeal.
Since the announcement of the so‑called “Liberation Day” tariffs in April, market volatility and international trade tensions have escalated. While agreements were struck with a handful of trading partners by late July, the broader legal battles have continued to unfold. The court’s stay, extending tariffs until mid‑October, buys time for final review but leaves a cloud of uncertainty hanging over trade policy, international negotiations and corporate planning.
Actors across sectors—from small import-reliant businesses to multinational corporations and foreign governments—are watching closely. Some economists warn of inflationary pressures and supply chain disruptions, while trade partners bristle at what they view as unpredictable and legally frail U. S. trade practices. Should the Supreme Court uphold the appellate ruling, it could mark a historic reassertion of congressional oversight over trade and a re-definition of the boundaries of emergency executive powers.