Federal Circuit Limits Executive Authority in Trump Tariffs Ruling

On August 29, 2025, the US Court of Appeals for the Federal Circuit issued a landmark decision in V.O.S. Selections, Inc., et al. v. Donald J. Trump, et al., striking down most of the global tariffs imposed under the International Emergency Economic Powers Act (IEEPA). 

As reported by Herbert Smith Freehills Kramer, the 7–4 ruling found that President Trump exceeded his statutory authority by using emergency powers to impose tariffs on imports from countries such as China, Canada, Mexico, and the European Union. The ruling does not take effect until October 14, 2025, leaving time for Supreme Court review.

The court determined that IEEPA, enacted in 1977 to address national emergencies, does not authorize the imposition of tariffs, noting that Congress retains constitutional authority over duties and trade remedies. The judges rejected the Trump Administration’s claims that trade deficits or fentanyl trafficking constituted the “unusual and extraordinary threats” contemplated by IEEPA. Applying the major questions doctrine, the majority held that such transformative and economically significant actions require explicit congressional authorization.

The decision covers tariffs ranging from 10% to 50% on goods from numerous countries. Herbert Smith Freehills Kramer notes that these measures have generated more than $81 billion in customs revenue but also contributed to over $34 billion in global profit losses, according to company reports. President Trump responded by denouncing the ruling and pledging to appeal the decision.

The takeaway is that executive reliance on emergency statutes faces new judicial limits, and tariff authority remains firmly with Congress. Companies should closely monitor the pending Supreme Court proceedings and reassess supply chain risks tied to contested tariff regimes.