An appeals court seemed skeptical of President Donald Trump’s tariffs after oral arguments on July 31, as multiple judges questioned whether a decades-old law Trump invoked had provided him the authority that he claimed it did.
The oral arguments came months after the U.S. Court of International Trade held in May that Trump’s tariffs were inconsistent with the International Economic Emergency Powers Act (IEEPA), which allows presidents to regulate imports in times of emergency. Whether that regulation of imports includes tariffs was the subject of considerable debate.
Article I of the Constitution grants Congress the power to levy tariffs, but the legislative branch may delegate that authority through federal law.
Arguing that the law granted Trump that authority, the administration appealed the May decision to the U.S. Court of Appeals for the Federal Circuit, which temporarily allowed Trump’s tariffs to proceed.
The July 31 hearing, before the Federal Circuit’s entire 11-member bench, focused on whether the appeals court should uphold the trade court’s block on Trump’s actions. The Federal Circuit heard arguments from the Justice Department and attorneys representing a group of states and a group of businesses that filed suit against the Trump administration.
The judges peppered both sides with questions but seemed especially critical of arguments from Justice Department attorney Brett Shumate, who was repeatedly interrupted by various judges. Many of their questions pointed to doubts about Trump’s argument that the law allowed him to impose a sweeping set of tariffs, but some also asked about the president’s declaration of an emergency induced by trade deficits.
One of the judges, for example, noted that the law didn’t use the word tariffs.
“The major concern I have is that [the IEEPA] doesn’t even mention the word ‘tariffs,’” the judge told Shumate.
Beyond allowing tariffs, the administration also faced questions indicating skepticism that Congress had allowed Trump to alter tariffs in such a broad way.
In its opinion in May, the U.S. Court of International Trade similarly targeted the scope of Trump’s tariffs.
“The President’s assertion of tariff-making authority in the instant case, unbounded as it is by any limitation in duration or scope, exceeds any tariff authority delegated to the President,” it stated.
During Shumate’s rebuttal on July 31, a judge told him, “It’s just hard for me to see that Congress intended to give the president … wholesale authority to throw out the tariff schedule that Congress adopted.”
One of the judges seemed potentially sympathetic to the idea that Congress granted the president greater authority in times of emergency.
“You don’t think that Congress could have conceived that the president ought to have more authority in … unusual circumstances?” the judge asked Oregon Solicitor General Benjamin Gutman.
Gutman responded that even under unusual circumstances, the president’s power would still be limited.
Trump had imposed targeted tariffs on Canada, Mexico, and China but also a broader set of tariffs on dozens of countries. During oral argument, Shumate said Trump’s tariffs represented the first time the IEEPA had been used to apply tariffs but that its language was similar to a predecessor law known as the Trading With the Enemy Act, which a court ruled allowed tariffs.
According to the states and businesses, trade deficits were a longstanding phenomenon for the United States and didn’t constitute the type of emergency that allowed Trump to take action under the law.
However, their attorneys faced questions about whether they should look more at the consequences of trade imbalances, rather than the imbalances themselves.
In one of his orders from April, Trump said that “large and persistent annual U.S. goods trade deficits have led to the hollowing out of our manufacturing base; inhibited our ability to scale advanced domestic manufacturing capacity; undermined critical supply chains; and rendered our defense-industrial base dependent on foreign adversaries.”
“The large, persistent annual U.S. goods trade deficits, and the concomitant loss of industrial capacity, have compromised military readiness; this vulnerability can only be redressed through swift corrective action to rebalance the flow of imports into the United States,” the order reads.
Reading from a portion of Trump’s order, one of the judges said she was concerned about compromised military readiness.
“That bothers me,” she said.
In a July 31 post on X, Attorney General Pam Bondi defended Trump’s tariffs, which she said “are transforming the global economy, protecting our national security, and addressing the consequences of our exploding trade deficit.”
The issue could ultimately be decided by the Supreme Court, which briefly weighed in on a petition from toy companies challenging Trump’s tariffs.
In June, the justices ultimately denied the companies’ request to take up the case at an earlier stage in litigation but didn’t foreclose the possibility that it would review the case at a later date.
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