A pivotal legal battle over President Donald Trump’s expansive use of emergency powers to impose tariffs is set to unfold Thursday, as the U.S. Court of Appeals for the Federal Circuit hears arguments in a high-stakes trade case.
At issue is whether Trump lawfully invoked the International Emergency Economic Powers Act (IEEPA) to justify a 10% baseline tariff on nearly all U.S. trading partners, including reciprocal duties on dozens of countries. A lower trade court previously ruled that the former president exceeded his authority under IEEPA, which traditionally allows economic sanctions in times of national crisis—not tariffs. However, the Federal Circuit temporarily reinstated the levies pending appeal.
The appeal, brought by 12 states and five small businesses, represents a major legal test of Trump’s trade policies—policies that formed a cornerstone of his economic agenda. Legal experts believe the case could eventually reach the Supreme Court, although how the conservative-leaning justices would rule remains uncertain.
On his social media platform, Trump acknowledged the case Thursday morning:
“To all of my great lawyers who have fought so hard to save our Country, good luck in America’s big case today. If our Country was not able to protect itself by using TARIFFS AGAINST TARIFFS, WE WOULD BE ‘DEAD,’ WITH NO CHANCE OF SURVIVAL OR SUCCESS. Thank you for your attention to this matter!”
Trump launched his tariff campaign on April 2—coining it “Liberation Day”—and argued that the measures would reduce trade imbalances and pressure countries into better trade agreements. The administration has since claimed success in securing trade deals with the European Union, United Kingdom, and five Asian countries. Critics, however, warn that such tariffs may raise consumer prices and slow economic growth.
Initially, reciprocal duties were scheduled to begin April 9, but Trump issued a 90-day delay and lowered those rates to 10%. Some of the steeper tariffs are expected to be reinstated on Friday. He has also proposed raising blanket tariffs to between 15% and 20% for nations that do not agree to new trade terms.
While the appeals case involves several tariffs, the court is specifically reviewing those tied to “Liberation Day” and tariffs on China, Canada, and Mexico, which Trump claimed were necessary to combat fentanyl trafficking.
IEEPA has never before been used by a U.S. president to impose tariffs. The Constitution reserves that power for Congress, and IEEPA itself contains no references to tariffs. The law allows emergency economic measures only when there’s an “unusual and extraordinary threat” to national security or the economy.
Trump argued that ongoing trade deficits and the influx of illicit drugs qualified as national emergencies. But the plaintiffs contend those justifications are overly broad and threaten to give the executive branch unchecked authority.
“By the government’s telling, IEEPA empowers the president to impose whatever tariffs he chooses any time he finds (in his assertedly unreviewable discretion) that a trade deficit is creating significant national problems,”
lawyers for the small businesses wrote in court filings.
They also assert that a separate statute—the Trade Act of 1974—provides a more appropriate framework for addressing trade deficits. That law limits tariffs to 15% and restricts their duration to five months.
Plaintiffs further argue that Trump’s actions violate the major questions doctrine and nondelegation doctrine. The former holds that major political or economic decisions require clear congressional authorization, while the latter prohibits Congress from giving away its legislative powers without clear guiding principles.
“Congress alone has constitutional authority to impose tariffs,”
the attorneys for the states argued.
“But under President Trump’s reading of IEEPA, Congress gave him the authority to rewrite the tariff schedules at his whim.”
In defense, Justice Department attorneys maintain that the tariffs are legally justified.
“President Trump has found that America’s exploding trade deficit, the implications of that deficit for our economy and national security, and a fentanyl importation crisis that has claimed thousands of American lives constitute national emergencies,”
they wrote.
They also warned that striking down the tariffs would severely undercut U.S. trade leverage.
“The CIT’s injunction would, if affirmed, disrupt the Executive Branch’s ongoing, sensitive diplomatic negotiations with virtually every major trading partner… and would unilaterally deprive the United States of a powerful tool for combating systemic distortions in the global trading system,”
the DOJ filing stated.
It remains unclear when the Federal Circuit will issue its decision.
