News / Six weeks of global trade unease amid legal battle over Trump's tariffs

The stakes for the Trump administration and shippers around the world have ballooned, following the decision by the US Court of Appeals on Friday that reciprocal and ‘liberation day’ tariffs are illegal. 

The next six weeks will be highly uncertain for trade – and the US. The White House is widely expected to take the case to the Supreme Court and has until 14 October to file a petition.  

And many in the freight industry expect importers to pause shipments to the US while the case is decided. 

The judges noted: “If, within that period [to October 14], any party notifies the clerk in writing that it has filed a petition for a writ of certio rari [going to a higher court], the clerk is directed to withhold issuance of the mandate, pending (1) the Supreme Court’s denial of certio rari, or (2) a judgment of the Supreme Court if certio rari is granted. While the issuance of the mandate is withheld, the United States Court of International Trade shall take no further action in this case.” 

There is a Republican-appointed majority on the Supreme Court of six judges out of nine. 

The stakes are now high. If the Supreme Court affirms the Court of Appeal decision, tariffs may have to be repaid, a complex business.

The court did not void steel and aluminium tariffs, but overall the US has collected $142bn from tariffs so far this fiscal year. Since President Trump’s tariffs took effect in April, they have netted some $96bn. That includes Customs duties of $27bn in June, up from $22bn in May and $16bn in April. 

Treasury secretary Scott Bessent has indicated he expects tariffs to generate $300bn annually. 

A loss for the president could mean challenges for countries which have already agreed trade deals, such as the UK – it is unclear whether they would remain valid. Countries currently negotiating may decide to await the Supreme Court’s decision. 

However, if Mr Trump wins at the Supreme Court, his power to introduce tariffs on a whim will be complete. However, it would weaken Congress. The judgment stated: “If the president can declare an emergency to cut the deficit by raising taxes in whatever way he wishes, not much remains of Congressional authority over taxation.” 

And it quoted: Congress “alone has access to the pockets of the people”. 

There is a legal way to impose tariffs, but they can’t be imposed for more than 150 days without Congress approval, and they cannot be more than 15%. If Mr Trump loses, this could be his only remaining option, outside of sectoral tariffs such as those on steel and aluminium.  

One of the key points of note from the 127-page court judgment is the number of times the tariffs have changed or been delayed, particularly for China. 

“The president repeatedly amended the China-specific reciprocal tariff rate in response to China’s adjustments of its own tariff rates on US goods: he first increased the China-specific rate from 34 to 84 percent, effective April 8, 2025 … and then from 84 to 125 per cent, effective April 10… Following discussions with Chinese officials, the president lowered the China-specific reciprocal tariff rate to 10 percent, effective until August 12, … On July 7, the president paused enforcement of all reciprocal tariffs until August 1. On July 31, the president again paused enforcement of the reciprocal tariffs for seven days. The reciprocal tariffs (other than for China) took effect on August 7, 2025.” 

The judgment took care to note that it was not judging the tariff policy itself.  

“We are not addressing whether the president’s actions should have been taken as a matter of policy. Nor are we deciding whether IEEPA authorises any tariffs at all. Rather, the only issue we resolve on appeal is whether the trafficking tariffs and reciprocal tariffs imposed by the challenged executive orders are authorised by IEEPA.  

“We conclude they are not.”