Trump Tariffs Deemed Unconstitutional: What Comes Next?

📍 Overview

In a landmark decision, the U.S. Court of Appeals for the Federal Circuit (CAFC) ruled that President Donald Trump lacked the legal authority to impose certain sweeping tariffs under the International Emergency Economic Powers Act (IEEPA). This ruling, which upholds a previous decision by the Court of International Trade (CIT), could have significant implications for U.S. trade policy and the federal government’s financial obligations.

⚖️ Legal Timeline

• May: CIT rules Trump’s tariffs under IEEPA are unconstitutional.

• August 29: CAFC upholds the CIT decision in a 7–4 en banc ruling.

• October 15: The ruling goes into effect, unless overturned by the Supreme Court.

🏛️ Next Steps

The Trump Administration appealed to the U.S. Supreme Court on September 3, which will likely determine the outcome. Solicitor General D. John Sauer asked the justices to take up the case and hear arguments in early November. “That decision casts a pall of uncertainty upon ongoing foreign negotiations that the President has been pursuing through tariffs over the past five months, jeopardizing both already negotiated framework deals and ongoing negotiations,” he wrote. “The stakes in this case could not be higher.”

If the Supreme Court upholds the lower courts’ decisions, the U.S. Treasury may be required to refund billions in import taxes already collected. The U.S. has collected $142 billion from tariff revenue so far this fiscal year, which ends in September, according to Treasury Department data. Since Trump’s tariffs took effect in April, his levies have generated about $96 billion in revenue, after customs duties jumped to $28 billion in July, marking an annual increase of 273%. Customs duties accounted for $27 billion in revenue for June, $22 billion in May and $16 billion in April. Before Trump’s tariffs were announced, customs duties totaled $8 billion in March and $7 billion in February and January.

📦 Tariffs Affected

The ruling applies to:

1. Emergency border tariffs targeting imports from Canada, Mexico, and China, particularly those related to fentanyl.

2. Reciprocal and universal tariffs applied broadly to imports from nearly every country.

🚫 Tariffs Not Affected

• Tariffs on steel, aluminum, and autos imposed after Commerce Department investigations (Section 232).

• Tariffs on Chinese imports from Trump’s first term, which were retained by President Biden.