If tariffs bring inflation to the US, Trump's popularity will fall, analyst says

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WASHINGTON - A federal appeals court ruled 7-4 on Friday that President Donald Trump's tariffs were illegal, and that he...

The Court of Appeals upheld a lower court ruling that Trump exceeded his authority in imposing most of his tariffs.

Despite the ruling, Trump's tariffs could remain in place for now to allow time for an appeal.

Here's what you need to know.

What happens next?

U.S. Attorney General Pam Bondi said the court's decision was wrong and that the Justice Department would appeal the decision to the Supreme Court.

If Trump's tariffs are overturned, the Trump administration has other ways to impose them, such as through the Trade Act of 1974. That specific law, however, limits tariffs to 15% and 150 days,"unless such period is extended by Act of Congress."

A lower court will also reconsider part of the case over whether the government should refund fees to all companies that already paid them, or only to parties that sued the government.

What tariffs does the court decision affect?

The decision involves tariffs imposed through five executive orders from February to April. In some of these orders, the Trump administration justified tariffs on Canada, Mexico, and China by claiming that these countries had taken insufficient action to stem the flow of illicit drugs into the United States.

In another order, Trump said that “large and persistent annual trade deficits in U.S. goods” with the rest of the world justified sweeping tariffs affecting more than 50 countries, including Brazil.

The decision does not cover all tariffs imposed by the Trump administration, such as those on steel and aluminum.

Why did the court rule that the tariffs were illegal?

The court ruled that Trump exceeded his authority by using the International Emergency Economic Powers Act of 1977 (IEEPA) to impose most of his tariffs. The IEEAP is an emergency law that has been used to impose economic sanctions in the event of threats against the country.

The Trump administration argued that the U.S. trade deficit constituted an emergency justifying the use of the law. But this was disputed by a group of state governments and small businesses.

In Friday's ruling, a majority of federal judges said the law"confers significant authority on the President to undertake various actions in response to a declared national emergency, but none of those actions explicitly includes the power to impose tariffs, duties, or the like, or the power to tax."

It was noted that, “in drafting IEEPA, Congress did not use the term ‘tariff’ or any of its synonyms, such as ‘duty’ or ‘tax,’” and that “other statutes indicate that whenever Congress intends to delegate to the President the authority to impose tariffs, it does so explicitly, either by using unambiguous terms like tariff and duty, or through a general framework that makes clear that Congress is referring to tariffs.”

“It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs,” the judges said.

The dissenting justices argued that “the language of IEEPA, as confirmed by its history, authorizes tariffs to regulate imports.”

They added that Trump's use of IEEPA "is not an unconstitutional delegation of legislative authority under Supreme Court decisions, which have upheld broad grants of authority, including tariff authority, in this area related to foreign affairs."

How did Trump respond to the decision?

In a social media post, Trump called the court a “Highly Partisan Court of Appeals” and said “ALL TARIFFS ARE STILL IN EFFECT!”

The 11 justices who heard the case were appointed by presidents from both parties. The dissenting opinion was written by a justice appointed by President Barack Obama.

The Liberty Justice Center, which represents the small businesses in the lawsuit, described Friday's ruling as its"second major victory" in its challenge to Trump's tariffs, adding that the IEEPA"does not give the President unilateral authority to impose tariffs on any country he wants, at any time he wants, at any rate he wants, for any reason he wants."

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"This decision protects American businesses and consumers from the uncertainty and harm caused by these unlawful tariffs," Jeffrey Schwab, senior attorney and director of litigation, said in a statement.

Since the tariffs were proposed, the Trump administration has signed agreements with the United Kingdom, the 27-nation European Union, Japan and South Korea.