US court overturns Trump's tariffs: a setback for his trade policy!

US court overturns Trump's tariffs: a setback for his trade policy!

A decisive ruling brings movement to the trade world: A US appeals court recently stripped President Donald Trump of the rights to impose far-reaching tariffs on imported products based on an emergency law. This decision takes effect on October 14, 2025, giving the US government time to go to the Supreme Court to challenge it. Nations that already have trade agreements with the United States are now faced with the question of how this landmark decision will affect their trade relationships. An exciting development that represents a notable setback to Trump's aggressive trade policy.

At the end of May, a court in New York declared the tariffs illegal, which the Trump administration didn't take long to decide and appealed. Although the appeals court overturned the New York court's blocking and other aspects, it essentially left much of the decision in place. These legal disputes relate to country-specific tariffs that Trump first announced in April 2025 and that affected a wide range of trading partners. A tariff rate of 15 percent now applies to most products from the EU until August 7th.

The legal framework behind the tariffs

What is the legal basis for these tariffs? The Trade Act of 1974 gives the US President broad authority to impose and lower tariffs. This regulation explains that the president may impose tariffs independently under certain circumstances. Additionally, the International Emergency Economic Powers Act of 1977 allows the president to take immediate action in the event of threats to national security. Trump has defended his course under the pretext of national security interests, an argument supported by experts such as PD Dr. Krista Nadakavukaren Schefer is not considered credible.

Numerous countries, including Canada and Mexico, have already announced retaliatory measures and could take legal action under the USMCA free trade agreement. There is also a lawsuit by China at the World Trade Organization (WTO): The country sees the new tariffs as illegal and could have legal consequences, especially since the WTO is currently limited in its ability to appeal due to the US blockade.

The challenges of international trade

In addition, the increase in bilateral and regional trade agreements is seen as a direct response to the difficulties within the WTO. Given the complexity of trading rules, it is becoming increasingly challenging for companies, especially smaller ones and those from low-income countries, to determine the optimal trading conditions. Experts warn that Trump's constant threats will not only disrupt international trade, but could also potentially lead to a trade war that would ultimately harm all businesses.

Overall, the current situation shows how fragile and tied to political events international trade relations are. The uncertainties created by Trump's policies not only create pressure for negotiations, but also the risk of trade conflicts that could ultimately have a negative impact on global markets. Persian negotiating leeway is undoubtedly becoming smaller, and the question remains whether the USA is embarking on an uncertain path, not only legally but also economically.

To find out more about the background and current developments, read the information from Radio Euskirchen, University of Basel and DW.