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A U.S. federal appeals court has ruled that tariffs imposed earlier this year under the International Emergency Economic Powers Act (IEEPA) were unlawful, dealing a major setback to the administration’s trade policy. In a decision issued August 29, the Court of Appeals for the Federal Circuit found that IEEPA does not grant the president authority to levy tariffs, since the law contains no explicit reference to duties or tariff powers. The court emphasized that the Constitution reserves tariff authority for Congress, and any delegation to the executive branch must be narrowly defined and clearly stated. The ruling affects “reciprocal” tariffs introduced in April 2025, along with measures targeting goods from China, Canada, and Mexico earlier in the year. Those tariffs had been justified on grounds of correcting trade imbalances and addressing cross-border fentanyl concerns. Tariffs imposed under other legal authorities, including Section 232 steel and aluminum measures and Section 301 trade enforcement actions, remain unaffected. For now, the IEEPA tariffs stay in place temporarily as the case returns to the U.S. Court of International Trade, which will determine whether the ruling applies only to the plaintiffs or has broader effect. Trade experts expect the case to be appealed to the U.S. Supreme Court, where a final decision could set lasting precedent on presidential tariff authority. Until then, businesses and supply chains remain in a holding pattern as the legal battle continues. |
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Sobel Net will continue to monitor these developments and provide timely updates to help you stay compliant and prepared. |
