A federal appeals court struck down President Donald Trump’s sweeping tariffs on Aug. 29, but the president still has several hands he can play.
The U.S. Court of Appeals for the Federal Circuit ruled that the administration overstepped its legal authority by invoking emergency powers to impose the sweeping “Liberation Day” tariffs. Despite the setback, administration officials remain optimistic that the Supreme Court will side in their favor, and they have numerous legal avenues still on the table for implementation of the president’s tariffs.
Trump declared a national emergency in April to impose reciprocal tariffs on virtually every nation under the International Emergency Economic Powers Act (IEEPA). The president invoked the IEEPA by declaring that unfair trade practices have resulted in a “large and persistent” trade deficit that constitutes an “unusual and extraordinary threat to the national security and economy of the United States.”
The tariffs have already generated over $140 billion in revenue for the government this fiscal year, according to the Treasury Department. The policy is also projected to reduce the deficit by $3.3 trillion, according to the Congressional Budget Office.
However, the appeals court determined that the presidential authority granted by the IEEPA to regulate imports in response to a national emergency does not extend to Trump’s Liberation Day tariffs. The court allowed the tariffs to remain in place through Oct. 14, providing the administration an opportunity to file an appeal with the Supreme Court.
Trump called the appeals court “highly partisan” and told reporters on Tuesday that he plans to appeal the ruling to the Supreme Court as early as Wednesday, requesting an expedited ruling. Administration officials, including Treasury Secretary Scott Bessent, have also said they are confident that the Supreme Court will agree with the administration’s interpretation of IEEPA.
“I’m confident the Supreme Court will uphold it — will uphold the president’s authority to use IEEPA,” Bessent said on Monday, according to Reuters. “And there are lots of other authorities that can be used.”
Bessent pointed to Section 338 of the Trade Act of 1930, which allows presidents to impose tariffs of up to 50% for five months against imports from countries found to discriminate against U.S. commerce.
Other legal tools at the administration’s disposal include Section 301 of the Trade Act of 1974, which allows the president to issue broad tariffs in response to unfair trading practices after an investigation. Section 122 of the Trade Act of 1974 allows a president to impose duties of up to 15% for up to 150 days, while Section 201 of the law provides for a maximum rate of 50% for an initial four-year period, extendable to eight years.
Tariffs on commodities like steel, aluminum and copper were implemented under Section 232 of the Trade Expansion Act and are not currently being challenged, as they adhere to longstanding precedent established by many prior administrations.
Bessent acknowledged that these alternative tariff options, due to their duration and rate limits, along with other prerequisites, are “not as efficient, not as powerful.”
Another possibility is for the administration to push Congress to enact a global tariff rate. Republican Rep. Greg Steube of Florida and Democratic Rep. Jared Golden of Maine introduced the Secure Trade Act in August, which would impose a 10% tariff baseline on all imported goods and create a China-specific tariff schedule to support a gradual reduction in reliance on Chinese imports.
Kenneth Rapoza, a global trade analyst for the Coalition for a Prosperous America, expressed confidence that the Supreme Court would rule in the administration’s favor, but warned against potential market disruptions if the tariffs are overturned.
“If the Supreme Court does not rule in their favor and they’re thrown a big curveball, it would be a big problem for the Trump administration and for the economy,” Rapoza told the Daily Caller News Foundation. “If those tariffs are deemed illegal, and companies are allowed to sue to get a refund, you’re looking at billions of dollars that would have to be repaid, and no real outlook for what would replace them.”
Rapoza also warned that a loss in tariff revenue could complicate budget projections related to the GOP’s sweeping tax and spending package.
“The real problem is, if the Supreme Court rules against [the Trump administration], you’re gonna have to recalculate your revenue projections for those tax cuts in the big, beautiful bill,” Rapoza said. “That revenue projection has been destroyed, and that’s going to be probably more chaotic than what the original Liberation Day announcement was.”
Trump also warned that trillions of dollars in domestic investments linked to recent trade deals could be at risk if his tariffs are invalidated. For instance, Japan committed to investing $550 billion in U.S.-based projects as part of its deal with the administration, while the EU pledged to purchase $750 billion in American energy and invest an additional $600 billion in the U.S. economy.
“More than 15 Trillion Dollars will be invested in the USA, a RECORD. Much of this investment is because of Tariffs. If a Radical Left Court is allowed to terminate these Tariffs, almost all of this investment, and much more, will be immediately cancelled!,” Trump said. “In many ways, we would become a Third World Nation, with no hope of GREATNESS again.”
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