Trump Tariffs to Be Tested in Federal Appeals Court

A U.S. federal appeals court is set to hear a case from a group of small business owners, challenging sweeping tariffs put in place by the Trump administration.

The U.S. Court of Appeals for the Federal Circuit is scheduled to hear the case on July 31, The Guardian reports. The group behind the lawsuit claims that President Donald Trump overstepped his authority by levying tariffs under 1977's International Emergency Economic Powers Act (IEEPA). The IEEPA allows the president to regulate trade in response to a national emergency, but it hasn't ever been used to enact broad tariffs without the approval of Congress.

“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," the group said in a court brief.

Read More: Legal Challenge to Trump Tariffs Leaves Supply Chains in Limbo

In response to the lawsuit, the U.S. Court of International Trade (USCIT) had initially ordered a temporary halt to Trump's blanket tariffs on May 28. The federal circuit appeals court then ruled a day later that the tariffs could remain in place ahead of the July 31 court date. Even after the appeals court reaches a decision, the case is likely to end up in front of the U.S. Supreme Court and its 6-3 majority of conservative justices, three of whom were appointed by Trump during his first term.

If the Supreme Court rules against Trump's tariffs, such a decision would effectively unravel a White House trade strategy that has relied heavily on the threat of hefty tariffs to force countries to negotiate on new trade deals.