The presidential powers that Donald Trump claimed under the International Emergency Economic Powers Act (IEEPA) to impose tariffs have been nullified by a federal appeals court. The ruling invalidates a key pillar of his protectionist economic strategy.
The court determined that the 1977 law does not provide the president with the authority to set import duties, a power that the U.S. Constitution assigns to Congress. The judges rejected the argument that a trade deficit could be considered a national emergency that would trigger such expansive and unwritten powers under the IEEPA.
The verdict creates immediate turmoil for U.S. trade policy. The informal agreements made with countries to shield them from these tariffs are now at risk, as they were negotiated under what the court has now defined as an illegal threat.
An appeal to the Supreme Court is expected, which will have the final say on this constitutional question. The case will force a clarification of the separation of powers and determine how much latitude a president has to use emergency declarations to circumvent the legislative process on major economic issues.