Trump’s trade deals and tariffs are on the chopping block in court. What happens next
U.S. President Donald Trump and British Prime Minister Keir Starmer react after picking up the trade agreement with the U.K. papers that Trump dropped as they speak to the media during the G7 summit in Kananaskis, Alberta, Canada, June 16, 2025.
Kevin Lamarque | Reuters
President Donald Trump‘s sweeping tariff powers and recent trade deals could soon run into a legal buzzsaw.
A federal appeals court is set to hear oral arguments next week in a high-profile lawsuit challenging Trump’s stated authority to effectively slap tariffs at any level on any country at any time, so long as he deems them necessary to address a national emergency.
The Trump administration says that that expansive tariff power derives from the International Emergency Economic Powers Act, or IEEPA.
The bulk of Trump’s biggest tariffs — including his fentanyl-related duties on Canada, Mexico and China, and the worldwide “reciprocal” tariffs he first unveiled in early April — rest on his invocation of that law.
The U.S. Court of International Trade struck those tariffs down in late May, ruling that Trump exceeded his authority under IEEPA.
People walk past the United States Court of International Trade, Watson Courthouse in lower Manhattan on May 29, 2025 in New York City.
Spencer Platt | Getty Images
But the U.S. Court of Appeals for the Federal Circuit quickly paused that decision, keeping the tariffs in effect while Trump’s legal challenge plays out.
The case, known as V.O.S. Selections v. Trump, is the furthest along of more than half a dozen federal lawsuits challenging Trump’s use of the emergency-powers law.
It’s set for oral argument before the Federal Circuit on Thursday morning.
“I think the tariffs are at risk,” said Ted Murphy, partner and head of global trade practice at law firm Sidley Austin, in an interview with CNBC.
The law has “never been used for this purpose,” and it’s “being used quite broadly,” Murphy said. “So I think there are legitimate questions.”
national emergencies stemming from “any unusual and extraordinary threat” that comes in whole or in large part from outside the U.S.
But attorneys representing the handful of small businesses that sued Trump argue that the law does not let him unilaterally impose tariffs.
“IEEPA nowhere mentions tariffs, duties, imposts, or taxes, and no other President in the statute’s nearly 50-year history has claimed that it authorizes tariffs,” they wrote in a court brief this month.
Attorneys for Trump and his administration, however, argue that Congress has long empowered presidents to impose tariffs to address key national concerns.
They argue that the statute’s language authorizing Trump to “regulate … importation” means he can use it to impose tariffs.
executive order specifying that he is invoking the emergency-powers law as part of a U.S. trade agreement with the United Kingdom.
US President Donald Trump (L) shakes hands with British Prime Minister Keir Starmer as they speak to reporters after meeting during the Group of Seven (G7) Summit at the Pomeroy Kananaskis Mountain Lodge in Kananaskis, Alberta, Canada on June 16, 2025.
Brendan Smialowski | Afp | Getty Images
Trump this month has also sent 25 letters to individual world leaders, dictating the new tariff rates that their countries’ U.S. exports will face starting Aug. 1.
That is the date when Trump’s reciprocal tariffs on dozens of countries’ imports — which were unveiled in early April and then repeatedly put on pause — are set to turn back on. Trump has said that his letters are tantamount to bilateral trade deals.
Those letters do not explicitly reference IEEPA. But their language echoes the same arguments about unfair trade, deficits and national security that Trump invoked during his reciprocal tariff rollout.
“The Administration is legally and fairly using tariff powers that have been granted to the executive branch by the Constitution and Congress to level the playing field for American workers and safeguard our national security,” White House spokesman Kush Desai told CNBC.
The White House ignored CNBC’s request to confirm that Trump’s leader-to-leader letters, and the tariff rates set in his recent spate of trade deals, hinge on IEEPA authority.
It has, however, confirmed that the massive 50% tariff Trump set on imports from Brazil did, in fact, rely on IEEPA powers.
Strangely, that letter focused less on trade and more on Trump’s gripes about Brazil’s treatment of its former president, Jair Bolsonaro, who is facing trial over his role in an alleged coup to overturn his 2022 reelection loss.
broader ruling against the Trump administration in a separate case in Washington, D.C., federal court.
The three-judge panel in V.O.S. specifically found that some of the tariffs Trump had imposed were unauthorized by IEEPA. But Contreras, in the case known as Learning Resources, Inc. v. Trump, ruled that the law itself does not allow a president to take any unilateral tariff actions.
The government appealed that ruling to the U.S. Court of Appeals for the D.C. Circuit, which paused a preliminary injunction that Contreras had issued. Oral arguments in the case are set for Sept. 30.
Two other federal lawsuits challenging the tariffs — one from the state of California, and one filed in Montana federal court by members of the indigenous Blackfeet nation — are set for separate oral arguments on Sept. 17 before the U.S. Court of Appeals for the Ninth Circuit.
At least three more pending cases before the Court of International Trade have been stayed until a final decision is returned in V.O.S., according to the Congressional Research Service.
