Trump's tariffs face reversal following the decision of a federal appellate court.

In a significant development, a federal appeals court has ruled that most of the tariffs imposed by President Donald Trump are illegal. The ruling limits the President's aggressive trade policy and could potentially cause a financial blow to the U.S. Treasury.

The court's decision stems from a challenge to the tariffs on foreign steel, aluminum, autos, and China-imposed tariffs that President Joe Biden kept. However, the court ruling does not cover these specific tariffs.

The court's ruling is based on the premise that the President does not have unlimited power to impose tariffs. The Trade Expansion Act of 1962 requires a Commerce Department investigation before levies can be imposed, and the Trade Act of 1974 restricts tariffs to 15% and to just 150 days on countries with which the United States runs big trade deficits.

The court wrote that it seems unlikely that Congress intended to grant the President unlimited authority to impose tariffs. The ruling further states that the President's Liberation Day tariffs exceed any authority granted under the emergency powers law.

President Trump has vowed to take the fight to the Supreme Court, stating that if the decision stands, it would "destroy the United States of America." If the Supreme Court upholds the ruling, the government may have to refund some of the import taxes it's collected, which could be a significant financial blow.

By July, revenue from tariffs totaled $159 billion, more than double what it was at the same point the year before. The tariffs have been a contentious issue, with supporters arguing they protect domestic industries, while critics claim they hurt consumers and businesses.

The US appellate court's ruling marks a significant limitation on President Trump's trade policy. If upheld by the Supreme Court, it could set a precedent for future administrations, limiting their ability to impose tariffs unilaterally.

Trump's tariffs face reversal following the decision of a federal appellate court.