The en banc U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) ruled on August 29, 2025, that the administration’s “Liberation Day” and other tariffs are illegal, but allowed the tariffs to remain in place until the issue is decided by the Supreme Court. The ruling upholds a decision of the Court of International Trade (“CIT”) in V.O.S. Selections v. Trump on May 28, 2025, finding the tariffs are illegal.

In February, the administration imposed tariffs on China (and others, including Canada), claiming they are necessary to address “the extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl” (the “fentanyl tariffs”). On April 2, 2025, the administration imposed tariffs on nearly every trading partner of the U.S., claiming they are necessary to address “the large and persistent trade deficit that is driven by the absence of reciprocity in our trade relationships and other harmful policies like currency manipulation and exorbitant value-added taxes (VAT) perpetuated by other countries” (“Liberation Day tariffs”). 

Although the Constitution gives Congress, rather than the President, power to impose tariffs (and other taxes), the administration claimed the tariffs were authorized under the International Emergency Economic Powers Act (“IEEPA”). IEEPA authorizes the President to “deal with any unusual and extraordinary threat, which has its source in whole or in substantial part outside the United States… if the President declares a national emergency with respect to such threat.” 50 U.S.C. § 1701. Among the powers IEEPA gives to the President to deal with the emergency, it allows the President to “regulate… importation.” 50 U.S.C. § 1702(a)(1)(B). The CIT held that IEEPA did not authorize the President to impose either the Liberation Day or fentanyl tariffs.

The Federal Circuit held that IEEPA does not authorize a President to impose either the Liberation Day or fentanyl tariffs. The court held that the words “regulate… importation” do not include the power to impose tariffs on goods imported from trading partners. The court found that other statutes giving the President the right to impose tariffs or taxes do so “clearly and unambiguously.” IEEPA does not contain a clear and unambiguous grant. Similarly, the court found that allowing the President to impose tariffs under IEEPA would violate the major questions doctrine. The major questions doctrine requires executive actions having “vast economic and political significance” to be “clearly” authorized by Congress. Util. Air Regul. Group v. EPA, 573 U.S. 302, 324 (2014). The court noted that tariffs are a “core Congressional power.” 

The Federal Circuit vacated the nationwide injunction on the tariffs issued by the CIT. The court stayed its order, however, until the Supreme Court either declines to hear the case or accepts the case and rules on it. The administration petitioned for Supreme Court review. Given that the Supreme Court will almost certainly take the case, the tariffs will likely remain in place for several months, whether or not they are ultimately deemed unlawful by the Supreme Court.