A US federal appeals court has ruled that most of the tariffs imposed by  President Donald Trump were illegal and went beyond his presidential powers.

In a 7-4 decision, the US Court of Appeals for the Federal Circuit said Trump wrongly used the International Emergency Economic Powers Act (IEEPA) to justify sweeping tariffs on goods from countries around the world.

The judges ruled that the IEEPA does not give presidents authority to impose tariffs, stressing that the power to set tariffs belongs to Congress. They described Trump’s “reciprocal” tariffs as “invalid and contrary to law.”

The ruling affects tariffs placed on China, Mexico, Canada, and nearly all countries through Trump’s 2024 executive orders. However, it does not impact tariffs imposed under other authorities, such as those on steel and aluminium.

The case began after small businesses and US states challenged the tariffs, arguing they hurt trade and raised costs. A lower court had already declared the tariffs unlawful, but the order was paused pending appeal.

Trump, reacting on Truth Social, slammed the decision as “highly partisan”, warning that scrapping the tariffs would “literally destroy the United States of America.” He insisted the levees were crucial for protecting the economy and national security.

Government lawyers had also defended the tariffs, saying that overturning them could trigger a financial collapse similar to the 1929 stock market crash.

The ruling, set to take effect on October 14 unless blocked, is likely to be appealed to the US Supreme Court. With six of the nine justices appointed by Republicans, including three by Trump himself, the case could become a landmark test of presidential powers and the limits of executive authority over trade policy.