A federal appeals court ruled Friday that many of President Donald Trump's most punitive tariffs are illegal, representing a major new setback for the administration that could severely damage its main source of leverage in an expanding global trade war.

The ruling, by the U.S. Court of Appeals for the Federal Circuit, upheld a lower court's finding that Trump does not have unlimited power under law to impose taxes on nearly all U.S. imports. But the appeals courts delayed implementation of their order until October to give the administration time to seek review by the Supreme Court, which would allow Trump to keep his disputed duties in place for now.

At the heart of the dispute is the extent to which Trump can invoke a decades-old economic emergency law to impose exorbitant tariffs on the country's major trading partners.

The law doesn't mention tariffs, but the president has used the statute to impose vast new levies, aiming to restructure U.S. trade relations and raise billions of dollars in revenue.

Trump's claims of broad trade power immediately sparked legal challenges from small businesses and states, which claimed they had been financially harmed by taxes on foreign goods that the president had no right to impose.

In May, a federal trade court agreed, invalidating many of the president's decisions, saying the law did not give him"unlimited authority" to wage his global trade war.

The Trump administration quickly appealed, and the court allowed the president to keep his tariffs in place while judges reviewed the legality of Trump's actions. This paved the way for the White House to expand its use of tariffs this month—with a new slate of tariffs targeting more than 90 countries—before the appeals judges could even rule.

The decision implicates tariffs Trump imposed under the International Emergency Economic Powers Act, known as IEEPA, including some of his most severe duties on China, Canada and Mexico, as well as the steep new tariffs the president announced on other countries this month.

No president before Trump had invoked the economic emergency law to tax imports. Without it, the White House could still impose tariffs, but they would be severely limited in scope and duration.

The court's decision does not affect the specific tariffs the president has applied to imported vehicles, steel and other products, which Trump imposed under a separate law that allows him to tax imports on national security grounds.

It's important to note that the appeals court postponed issuing its order until October, giving the Trump administration time to file an appeal with the Supreme Court. In the meantime, it appears the tariffs may remain in effect.

However, the decision has no effect on some of the president's measures, such as those applied to products for alleged national security reasons.