A federal appeals court just ruled that most of President Trump’s “reciprocal tariffs” are illegal because he went beyond his legal power as president. These tariffs were huge. They covered almost 70% of U.S. imports and charged other countries, like Mexico, Canada, China, India, and Brazil, up to 50% on goods. The court said only Congress can create taxes like tariffs, not the president. For now, the tariffs will stay in place until mid-October while Trump appeals to the Supreme Court. If the Court agrees with the ruling, Trump can still put tariffs in place but only in smaller amounts and for shorter time periods using a different law.
Some of Trump’s tariffs are still safe. His taxes on steel and aluminum (called Section 232 tariffs) are not affected by the ruling and were recently expanded to cover more products. These tariffs are likely to stay even if the Supreme Court removes the bigger ones. Other tariffs that started during Trump’s first term on China also remain, along with a new rule that removes the $800 “free pass” for small imports, meaning even cheap goods from overseas now face extra costs. This all means Trump might shift to using more focused, industry-specific tariffs instead of taxing almost all imports.
This case shows how economic policy is shaped by the balance of power between the president, Congress, and the courts and how trade policy can have big effects on global markets and domestic businesses.
Source : https://www.cnbc.com/2025/08/30/trump-trade-tariffs-appeals.html
4 comments:
By Trump pushing for this tariff movement this early in second presidential seating it creates an interesting position for the Supreme Court. By the Court ruling the "reciprocal tariffs" illegal right now that may change in the up incoming future. If the court rules it illegal how does that affect Trump's movement on tariffs in the future. If the Supreme Court back Trump and allows him to tariff these countries the way he is currently doing so, will he raise the tariffs to 100% as he said he would when he was running for president. If so how could this affect the United States economy in the Long-Run?
What I find interesting is how this case highlights the role of checks and balances in shaping economic policy. Tariffs aren't just about trade; they also test the limits of presidential power versus Congress. Even if Trump loses the broader tariffs, the fact that Section 232 tariffs on steel and aluminum remain shows how much influence specific industries can hold in policy. I wonder if future administrations will rely more on these narrower, sector-based tariffs rather than sweeping ones.
Seeing congress and the supreme court make different decisions per different tariff arrangements is surprising to me, as with how the media pants it it seems like everything is determined by whether they support trump or not compared to what the policy is actually discussing. In the case of tariffs, seeing the different decisions with checks and balances in mind is surprising to me, and makes me interested to see what the future holds.
The ruling shows how much of Trump’s trade strategy depended on stretching presidential authority. Even if some tariffs stay, losing the broad ones changes the whole approach. If the supreme court keeps pushing back on Trump's tariff power, we might see a huge shift in his influence on trade in the future.
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