Highlights:

• U.S. appeals court rules most Trump-era global tariffs illegal, citing exceeded presidential authority.

• Reciprocal tariffs remain in effect temporarily, pending potential Supreme Court review.

• Brazil, Mexico, and India respond with countermeasures or new tariffs, raising geopolitical stakes.

The legal landscape of U.S. trade policy faces renewed uncertainty after a federal appeals court ruled that most of President Donald Trump’s global tariffs were imposed beyond his legal authority. The decision, handed down by the U.S. Court of Appeals for the Federal Circuit, reaffirmed an earlier ruling by the Court of International Trade, while allowing the tariffs to remain temporarily in effect as the case proceeds. The ruling underscores the fragility of a cornerstone of Trump’s foreign policy strategy, which has relied heavily on emergency powers to impose sweeping duties.

Legal Challenges to Presidential Authority

The court found that the president exceeded his authority by invoking emergency powers to implement reciprocal tariffs across dozens of trade partners. While the decision does not immediately remove the tariffs, it exposes them to significant legal risk and sets the stage for potential Supreme Court review. Trump responded to the ruling on Truth Social, declaring that “ALL TARIFFS ARE STILL IN EFFECT!” and characterizing the court as “Highly Partisan,” signaling an intention to continue leveraging tariffs as a tool of economic policy.

The legal uncertainty has implications beyond Washington, affecting businesses that rely on stable trade regulations. Companies importing goods from affected countries now face operational and financial risks as they navigate the possibility of retroactive tariff changes, adding complexity to supply chain planning and pricing strategies.

Global Responses and Trade Tensions

International reactions are swift. Brazilian President Luiz Inacio Lula da Silva has authorized plans to retaliate against U.S. tariffs, which include duties as high as 50%, although he signaled willingness to negotiate. Meanwhile, Mexico plans to raise tariffs on Chinese goods under its 2026 budget, targeting vehicles, textiles, and plastics, reflecting concerns over transshipment of goods from China through Mexico. These measures illustrate how U.S. policy decisions reverberate across Latin America, complicating existing trade agreements and supply chains.

India, likewise, faces new 50% tariffs on exports to the U.S., a move linked to its purchases of Russian oil. Experts warn this could disrupt decades-long efforts to strengthen U.S.-India economic ties and may prompt New Delhi to accelerate trade diversification strategies. These retaliatory or protective measures underscore the interconnectedness of global trade and the ripple effects of U.S. policy decisions.

Implications for Markets and Trade Policy

The appeals court ruling and subsequent international responses create a climate of uncertainty for global markets. The continuation of tariffs, coupled with potential legal reversals, heightens volatility for importers, exporters, and multinational firms. Investors and policymakers alike are watching closely, as the Supreme Court’s eventual decision could redefine presidential authority over trade and reshape U.S. leverage in international negotiations.

As the situation unfolds, the administration’s ability to maintain its tariff strategy while negotiating trade agreements will be critical. Businesses will need to remain agile, monitoring both legal developments and international responses, while governments weigh the economic and political costs of retaliatory measures. The coming months will test the balance between legal limits, market stability, and the strategic objectives of U.S. trade policy on a global stage.