Will Trump's tariffs become ineffective? The court ruled that Trump "illegally" invoked IEEPA for taxation, and Washington responded: tariffs are legal and necessary.

The U.S. Federal Appeals Court ruled that Trump’s imposition of broad tariffs on nearly all countries under the International Emergency Economic Powers Act (IEEPA) of 1977 constitutes an overreach of authority and is thus illegal. However, Trump’s side stated that they would appeal this ruling and insisted that the tariffs are legal and necessary. (Background: The U.S. and Europe finalized trade details: a 15% tariff on automobiles and semiconductors, and the EU will purchase $750 billion worth of energy products from the U.S.) (Additional context: Trump has indicated that he will announce tariffs on steel and semiconductors as early as next week! Bitcoin has fallen below $118,000, and Ethereum has dropped below $4,600.) The U.S. Federal Appeals Court ruled on August 29 local time that President Trump’s imposition of broad tariffs on nearly all countries under the IEEPA is an overreach of authority and therefore illegal. This ruling poses a significant challenge to Trump’s trade policy, but the current tariff measures remain in effect pending Trump’s further appeal. Ruling rationale: Presidential powers are limited; trade deficits do not constitute an emergency. The Federal Appeals Court ruled 7 to 4 that the tariffs implemented by Trump’s administration under the IEEPA exceeded the authority granted by Congress to the president. The judges pointed out in their ruling that Congress did not intend to grant the president unlimited tariff authority when enacting the IEEPA. The court found that Trump’s characterization of long-standing trade deficits as a "national emergency" lacks sufficient basis, as the U.S. has had trade deficits for 49 consecutive years, regardless of economic conditions, which does not meet the IEEPA's requirement for an "extraordinary and unusual" threat definition. Furthermore, the "trafficking tariffs" against Canada, China, and Mexico were also ruled ineffective in addressing the claimed drug and immigration issues, violating the applicable conditions of the IEEPA. Affected tariffs and current situation: Suspension of abolition, grace period until mid-October. This ruling involves two main sets of tariffs. First, the reciprocating tariffs: Trump announced the "Liberation Day" tariffs on April 2, imposing a maximum 50% tariff on countries with which the U.S. has a trade deficit and a 10% benchmark tariff on other countries. Secondly, the trafficking tariffs: tariffs imposed on imports from Canada, China, and Mexico aimed at compelling these countries to curb the influx of drugs and illegal immigrants into the U.S. Notably, although the court ruled these tariffs illegal, they were not immediately abolished but granted Trump’s administration a grace period until October 14 to appeal to the U.S. Supreme Court. This means that all current tariff measures can continue to be enforced, and the uncertainty in the trade market will persist as a result. The White House and Trump’s strong response: Tariffs are legal and necessary. However, regarding this ruling, White House spokesman Kush Desai issued a statement emphasizing that Trump lawfully exercised the tariff powers granted by Congress to protect the U.S. from foreign threats and maintain economic security. He stated, "President Trump’s tariff policy will continue to be effective, and we look forward to achieving a final victory in this matter." At the same time, Trump himself responded on social media, strongly criticizing the appellate court’s ruling: "All tariffs remain in effect! Today, a highly partisan appellate court mistakenly determined that our tariffs should be canceled, but they know that America will ultimately prevail. If these tariffs are canceled, it will be a total disaster for the country. It will make us financially vulnerable, and we must remain strong." He further pointed out that tariffs are the best tool to protect American manufacturers, farmers, and workers, and hinted that the Supreme Court will overturn the ruling, saying: "With the help of the U.S. Supreme Court, we will use tariffs to benefit our country and make America great, strong, and influential again!" Related reports: The U.S.-China tariff war affects Bitcoin mining company CleanSpark facing $185 million tariffs on imported BTC mining rigs. Taiwan's collective anxiety over semiconductor tariffs: What is the U.S. "Section 232"? Bitmain will build its first factory in the U.S.! Responding to policy incentives and pressure from Trump’s tariffs, production is expected to start in early 2026. <Trump's tariffs may become ineffective? Court rules Trump 'illegally' invoked IEEPA to levy taxes, Washington responds: Tariffs are legal and necessary> This article was first published in BlockTempo, the most influential blockchain news media.