A U.S. appeals court on Friday upheld an earlier ruling that U.S. President Donald Trump’s tariffs on Canada and other countries under national emergency provisions were imposed illegally, but will keep the duties in place for now.
The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., in a split decision, agreed with a specialized federal trade court that Trump exceeded his authority as president by hitting Canada, Mexico, China and dozens of other trading partners with sweeping tariffs that have upended global trade and economies.
The ruling did not strike down the tariffs immediately, however, but instead keeps them in place until Oct. 14 to allow for the Trump administration to appeal to the U.S. Supreme Court.
“ALL TARIFF ARE STILL IN EFFECT,” Trump posted on his Truth Social website after the ruling was released.
“Today a Highly Partisan Appeals Court incorrectly said that our tariffs should be removed, but they know the United States of America will win in the end.”
The 7-4 decision upholds a ruling in May by the U.S. Court of International Trade, which found Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs by declaring national emergencies was unlawful and violated the U.S. Constitution, which affords tariffing and tax powers to the U.S. Congress.
That court’s order to immediately rescind Trump’s tariffs was quickly stayed by the appeals court to allow the case to proceed.
Trump used IEEPA for two of his largest trading policies: so-called “reciprocal tariffs” on dozens of countries to combat what Trump claimed was a national emergency of trade deficits; and what the courts have referred to as “trafficking tariffs” on Canada, Mexico and China, which Trump has accused of contributing to a national emergency of fentanyl entering the U.S.
The majority of justices on the appeals court sided with the trade court in noting the IEEPA makes no mention of tariffs, and that the Trump administration was wrong to argue the president has unlimited tariffing power under that law.
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“We are not addressing whether the President’s actions should have been taken as a matter of policy. Nor are we deciding whether IEEPA authorizes any tariffs at all,” the majority wrote.
“Rather, the only issue we resolve on appeal is whether the Trafficking Tariffs and Reciprocal Tariffs imposed by the Challenged Executive Orders are authorized by IEEPA. We conclude they are not.”
The court noted Trump has other powers to impose tariffs without Congress, including Section 232 of the U.S. Trade Expansion Act, which has been used to tariff foreign steel, aluminum and other specific sectors.
White House spokesperson Kush Desai said in a statement to Global News that the administration “look(s) forward to ultimate victory in this matter.”
“President Trump lawfully exercised the tariff powers granted to him by Congress to defend our national and economic security from foreign threats,” Desai said.
The case was originally brought by several U.S. state attorneys general and a group of private American businesses that have argued the tariffs add extra costs and uncertainty to international trade, as well as small businesses and consumers who rely on cheaper foreign goods. The lawsuits did not address the Section 232 tariffs.
“The President cannot lawfully impose tariffs on his own, and IEEPA does not give him unlimited unilateral tariff authority,” Jeffrey Schwab of the Liberty Justice Center, which brought the lawsuit on behalf of the private business plaintiffs, said in a statement after the ruling Friday.
“This decision protects American businesses and consumers from the uncertainty and harm caused by these unlawful tariffs.”
Trump has used the tariffs and threats of even steeper levies to strike new trade deals with the European Union, Japan, Britain and other countries.
The tariffs on Canada, which do not cover goods traded under the Canada-United States-Mexico Agreement on free trade, were raised to 35 per cent on Aug. 1. The White House at the time cited Canada’s reciprocal tariffs — which are now set to be removed starting Sept. 1 — and what it called a lack of cooperation on fighting fentanyl trafficking as reasons for the increase.
Canada has stepped up border security resources and law enforcement operations against domestic fentanyl labs since Trump first threatened his tariffs after his election win in November. Fentanyl seized at the Canada-U.S. border by American authorities accounts for less than one per cent of all fentanyl encountered at U.S. borders, according to U.S. data.
The sometimes-stalled negotiations on a new trade and security agreement between Canada and the U.S. resumed this week.
In a dissenting opinion, four of the appeals court judges noted Trump’s tariffs on Canada, Mexico and China have been used as a “bargaining chip” to secure more cooperation on fighting fentanyl trafficking, and have been adjusted accordingly, arguing the IEEPA allows a president to take whatever measures are necessary to deal with an emergency.
The dissent cited the use of IEEPA during the Iran hostage crisis in 1979, though the law’s usage at that time only froze Iranian assets and did not impose tariffs on Iranian goods.
The Trump administration had argued that courts approved former president Richard Nixon’s emergency use of tariffs during a 1971 economic crisis under a 1917 law that IEEPA later replaced. The courts have so far rejected that argument, saying it did not apply to this case.
If the tariffs are ultimately struck down, the government might have to refund some of the import taxes that it’s collected, delivering a financial blow to the U.S. Treasury.
“If these Tariffs ever went away, it would be a total disaster for the Country,” Trump wrote on Truth Social on Friday. He has previously warned of another “GREAT DEPRESSION.”
Revenue from tariffs totaled a record US$142 billion by July, more than double what it was at the same point the year before.
The U.S. Justice Department warned in a legal filing this month that revoking the tariffs could mean “financial ruin” for the United States.
—with files from Global’s Reggie Cecchini and the Associated Press
© 2025 Global News, a division of Corus Entertainment Inc.
Trump’s tariffs on Canada, other countries are illegal: U.S. appeals court
