Trump’s global tariffs ruled illegal, raising economic and political uncertainty

A US appeals court has ruled that former President Donald Trump’s global tariffs were imposed illegally, casting fresh doubt over the future of one of his signature economic policies.

The decision, handed down late last night (29 August 2025), upheld an earlier judgment from the New York–based Court of International Trade, which found that Trump had exceeded his authority by using emergency powers from a 1977 law to justify sweeping tariffs on US trading partners. The court has allowed the measures to remain in place until mid-October, setting up a potential showdown at the Supreme Court later this autumn.

Trump responded on his Truth Social platform, criticising the ruling and insisting that removing tariffs would be “a total disaster” that would “literally destroy the United States of America.” With six of the eleven Supreme Court justices affiliated with the Republican Party, including three appointed by Trump himself, the final outcome remains uncertain.

The legal challenge was brought by small businesses and a coalition of U.S. states, who argued that Congress, not the president, has the power to impose broad-based tariffs. The ruling does not affect sector-specific tariffs, such as those on steel and aluminium, which continue to shape trade flows and consumer prices.

Speaking to Channel 4 News, LBS Professor of Economics Linda Yueh said Trump’s policy “might actually be in peril,” but noted that targeted tariffs are likely to persist. “Tariffs can work to raise revenue, but they are a blunt tool,” she explained, highlighting that American households are paying thousands more per year as a result.

The uncertainty has already had an impact on global markets. Businesses are delaying shipments, rerouting goods, and holding back on investment until there is clarity. Inflation in the US remains above target at 2.7 per cent, and forecasts of economic growth this year have been revised down partly due to the tariffs’ effects.

“Global capitalism values stability above all else,” Yueh observed. “At the moment, uncertainty around U.S. trade policy is dampening business activity worldwide.”

With midterm elections looming, attention now turns to Congress, which may face renewed pressure to take a more active role in shaping US trade policy.

The full interview can be viewed here