Trump’s trade deals, tariffs face key test in court next week
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.”
V.O.S.
IEEPA gives Trump some powers to deal with 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.
