A US appeals court has declared President Donald Trump’s tariff measures illegal, ruling that they amount to a misuse of the International Emergency Economic Powers Act (IEEPA). If the Supreme Court upholds this judgment, it could significantly curtail the US President’s authority over trade and tariff policies.
The appeals court held that Congress—not the President—has the constitutional power to impose tariff measures. However, the existing tariffs on several countries, including India, will remain in place until October 14, when the order takes effect. Trump still has the option of appealing to the Supreme Court. Relief for India and other affected countries will depend on the outcome of that case, said Abhijit Das, former Head of the Centre for WTO Studies at the Indian Institute of Foreign Trade.
The IEEPA, enacted in 1977, was intended to give US presidents wide authority to impose sanctions and financial restrictions in times of foreign emergencies. It does not, however, explicitly authorize tariffs. Trump invoked the law in 2019 and again in 2025, citing the US trade deficit and alleged inflows of fentanyl—a powerful synthetic opioid—from China, Canada, and Mexico as justification for new duties.
“It is most likely that the Supreme Court may also strike down these measures as illegal. But the catch is—what if Trump secures congressional backing and pushes this through as a National Emergency?” said Dr. Rajan Sudesh Ratna, Deputy Head and Senior Economic Affairs Officer at the UN ESCAP South and South-West Asia Office. He called the verdict a “moral victory for all other countries against Trump’s tariff policy,” but cautioned that Indian exporters will continue to face the 50% duty “till at least December 2025,” as a Supreme Court ruling could take until early 2026.
If the Supreme Court affirms the lower court ruling, tariffs imposed under IEEPA may have to be recalculated, potentially opening the door for relief to exporters from countries such as China and Brazil. “The US court battle will shape the future of world trade. The Supreme Court will decide whether tariffs remain a matter of congressional lawmaking, or an instrument of presidential geopolitics,” said Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI). He added that the appeals court has already dealt a major blow to Trump’s tariff strategy.
The US tariffs of 50% on Indian goods came into force this week. While Trump claimed the move was a punishment for India’s purchase of Russian oil, a report by Jefferies suggested it was driven by his “personal pique” at being denied the chance to mediate in the India-Pakistan conflict.