What happens next after Trump’s tariffs ruled illegal?

“Businesses are going to be subject to uncertainty,” warns London Business School's Dr Linda Yueh, after a US federal appeals court ruled that Donald Trump’s sweeping global tariffs were imposed illegally. She told the BBC that the legal uncertainty could “dampen down economic activity” as trading partners hold off on business with the U.S. while waiting for clarity from the courts.

The ruling, delivered on 30 August, found that Trump exceeded his presidential authority when he used emergency powers under the 1977 International Emergency Economic Powers Act (IEEPA) to justify tariffs on nearly every US trading partner. The judges stressed that the IEEPA “neither mentions tariffs… nor has procedural safeguards that contain clear limits” on presidential authority to impose them.

The decision upholds an earlier judgment from the Court of International Trade and means that Trump’s reciprocal tariffs, including the 10 per cent blanket levy announced last year, will remain in place until mid-October, when the U.S. Supreme Court is expected to hear the case.

The outcome has both economic and political stakes. Businesses face uncertainty over billions of dollars in import taxes already collected, while global markets may see further instability if tariffs are suddenly withdrawn. Countries such as the UK, Japan, and South Korea, which negotiated individual trade deals with Trump’s administration, could also find those agreements thrown into doubt.

For Trump, the legal battle cuts to the heart of his political brand. On Truth Social, he decried the appeals court as “highly partisan” and warned that overturning tariffs would “literally destroy the United States of America.” Yet if the Supreme Court affirms the ruling, it would represent a major blow to his economic strategy.

With mid-October looming, the case sets up a high-stakes legal and economic showdown, one that, as Dr Yueh notes, leaves businesses and investors facing an uncertain and potentially volatile autumn.

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