A U.S. federal appeals court appeared unconvinced Thursday by arguments from the Justice Department defending President Donald Trump’s sweeping use of emergency powers to unilaterally impose global tariffs—an approach that has sent shockwaves across international markets and strained diplomatic ties.
At the heart of the dispute is Trump’s invocation of the International Emergency Economic Powers Act (IEEPA), a 1977 law historically used to restrict financial transactions during national emergencies, not to levy tariffs. Trump is now the first president to use the statute as a legal foundation for his far-reaching trade restrictions since reclaiming the White House in January 2025.
The hearing at the U.S. Court of Appeals for the Federal Circuit comes after the U.S. Court of International Trade ruled in May that Trump’s tariffs—both the general 10% “reciprocal tariff” and additional “trafficking-related” duties—overstepped presidential authority. The ruling was quickly paused by the appellate court, leaving the tariffs in effect while legal arguments continue.
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During Thursday’s session, the appellate judges grilled Justice Department attorney Brett Shumate on whether IEEPA actually gives the president the power to set import duties. One judge challenged Shumate by pointing out that the law mentions “foreign exchange,” “currency,” and “payments,” but not tariffs, asking why tariffs should be lumped into that framework at all.
“There’s an old expression in the law: noscitur a sociis—‘a word is known by the company it keeps,’” the judge said. “Tariffs seem to have no friends in that statute. So, why?”
Shumate maintained that IEEPA gives the president broad discretion in emergencies. But plaintiffs’ attorney Neal Katyal—former Acting Solicitor General—countered forcefully, warning the court that accepting the administration’s view would strip Congress of its constitutional power over trade and tariffs.
“The president is saying he, on his own, with his say-so, can impose these tariffs.”
“And that is something no president in 200 years has ever thought. The tariff power goes all the way back to the Revolutionary War and, you know, the protests in the Boston Tea Party and the like,” Katyal said on MSNBC’s “Morning Joe.”
Katyal emphasized that the power to impose tariffs lies solely with Congress, citing the Boston Tea Party and America’s founding-era trade conflicts as historic evidence that the U.S. Constitution never intended for unilateral tariff authority to rest with the president.
A Trade Policy Flashpoint with Global Ramifications
Trump’s tariffs, first announced in April under the revived “reciprocal tariff” plan, slapped a blanket 10% baseline duty on nearly all imported goods, while targeting select nations—such as China, Mexico, and Canada—with even higher rates. He cited national security threats and economic retaliation by foreign governments to justify the measures.
The strategy sent global markets into brief turmoil. Although Trump later delayed implementation of some tariff hikes to calm financial nerves, a new wave of duties is set to snap into effect Friday. The administration insists the tariffs are necessary to level the playing field and protect U.S. industries from unfair foreign practices.
But the fallout has been severe. U.S. allies say the duties are damaging global supply chains and undermining trade talks. Emerging markets, already strained by inflation and debt, have warned that prolonged tariff wars could push them closer to recession.
A ruling against the tariff policy would deliver a huge relief to dozens of countries still scrambling to negotiate exemptions or bilateral trade agreements with Washington before the new round of duties begins.
On his social media platform Truth Social, Trump underscored what he sees as the stakes of the legal showdown.
“If our Country was not able to protect itself by using TARIFFS AGAINST TARIFFS, WE WOULD BE ‘DEAD,’ WITH NO CHANCE OF SURVIVAL OR SUCCESS,” he posted on Thursday morning.
The White House has long argued that without aggressive trade tools, the U.S. would continue losing out to foreign competitors. Attorney General Pam Bondi echoed the administration’s stance ahead of the hearing, saying: “We will continue to defend President Trump’s executive authority in courtrooms across the country.”
However, legal scholars warn that allowing the president to wield such sweeping trade powers without congressional approval could set a dangerous precedent—one that could outlast Trump and fundamentally alter the separation of powers in American governance.
The Federal Circuit Appeals Court is not expected to issue a ruling immediately. But legal experts say the outcome of this case—V.O.S. Selections v. Trump—will likely shape the future of U.S. trade policy and executive authority.
With several other lawsuits challenging Trump’s tariff regime waiting in the wings, a definitive judgment from the appeals court could either validate Trump’s aggressive economic nationalism or strip him of one of the most controversial tools in his trade arsenal.