high price

WASHINGTON — A federal appeals court ruled Friday that President Trump had no legal right to impose sweeping tariffs but left in place for now his effort to build a protectionist wall around the American economy.

The U.S. Court of Appeals for the Federal Circuit ruled Trump wasn’t legally allowed to declare national emergencies and impose import taxes on almost every country on earth, a ruling that largely upheld a May decision by a specialized federal trade court in New York.

But the 7-4 court did not strike down the tariffs immediately, allowing his administration time to appeal to the Supreme Court.

The president vowed to do just that. “If allowed to stand, this Decision would literally destroy the United States of America,” Trump wrote on his social medial platform.

The ruling complicates Trump’s ambitions to upend decades of American trade policy completely on his own. Trump has alternative laws for imposing import taxes, but they would limit the speed and severity with which he could act. His tariffs — and the erratic way he’s rolled them out — have shaken global markets, alienated U.S. trading partners and allies and raised fears of higher prices and slower economic growth.

But he’s also used the levies to pressure the European Union, Japan and other countries into accepting one-sided trade deals and to bring tens of billions of dollars into the federal Treasury to help pay for the massive tax cuts he signed into law July 4.

“While existing trade deals may not automatically unravel, the administration could lose a pillar of its negotiating strategy, which may embolden foreign governments to resist future demands, delay implementation of prior commitments, or even seek to renegotiate terms,” Ashley Akers, senior counsel at the Holland & Knight law firm and a former Justice Department trial lawyer, said before the appeals court decision.

The government has argued that if the tariffs are struck down, it might have to refund some of the import taxes that it’s collected, delivering a financial blow to the U.S. Treasury.

“It would be 1929 all over again, a GREAT DEPRESSION!” Trump said in a previous post on Truth Social.

Revenue from tariffs totaled $142 billion by July, more than double what it was at the same point the year before. Indeed, the Justice Department warned in a legal filing this month that revoking the tariffs could mean “financial ruin” for the United States.

The ruling involves two sets of import taxes, both of which Trump justified by declaring a national emergency under the 1977 International Emergency Economic Powers Act (IEEPA):

— The sweeping tariffs he announced April 2 — “Liberation Day,’’ he called it — when he imposed “reciprocal’’ tariffs of up to 50% on countries with which the United States runs trade deficits and a “baseline’’ 10% tariff on just about everyone else. The national emergency underlying the tariffs, Trump said, was the long-running gap between what the U.S. sells and what it buys from the rest of the world. The president started to levy modified the tariff rates in August, but goods from countries with which the U.S. runs a surplus also face the taxes.

— The “trafficking tariffs’’ he announced Feb. 1 on imports from Canada, China and Mexico. These were designed to get those countries to do more to stop what he declared a national emergency: the illegal flow of drugs and immigrants across their borders into the United States.

The Constitution gives Congress the power to impose taxes, including tariffs. But over decades, lawmakers have ceded authorities to the president, and Trump has made the most of the power vacuum.

But Trump’s assertion that IEEPA essentially gives him unlimited power to tax imports quickly drew legal challenges — at least seven cases. No president had ever used the law to justify tariffs, though IEEPA had been used frequently to impose export restrictions and other sanctions on U.S. adversaries such as Iran and North Korea.

The plaintiffs argued that the emergency power law does not authorize the use of tariffs.

They also noted that the trade deficit hardly meets the definition of an “unusual and extraordinary’’ threat that would justify declaring an emergency under the law. The United States, after all, has run trade deficits — in which it buys more from foreign countries than it sells them — for 49 straight years and in good times and bad.

The Trump administration argued that courts approved President Richard Nixon’s emergency use of tariffs in a 1971 economic crisis that arose from the chaos that followed his decision to end a policy linking the U.S. dollar to the price of gold. The Nixon administration successfully cited its authority under the 1917 Trading With Enemy Act, which preceded and supplied some of the legal language used in IEEPA.

In May, the U.S. Court of International Trade in New York rejected the argument, ruling that Trump’s Liberation Day tariffs “exceed any authority granted to the President’’ under the emergency powers law. In reaching its decision, the trade court combined two challenges — one by five businesses and one by 12 U.S. states — into a single case.

In the case of the drug trafficking and immigration tariffs on Canada, China and Mexico, the trade court ruled that the levies did not meet IEEPA’s requirement that they “deal with’’ the problem they were supposed to address.

The court challenge does not cover other Trump tariffs, including levies on foreign steel, aluminum and autos that the president imposed after Commerce Department investigations concluded that those imports were threats to U.S. national security.

Nor does it include tariffs that Trump imposed on China in his first term — and President Joe Biden kept — after a government investigation concluded that the Chinese used unfair practices to give their own technology firms an edge over rivals from the United States and other Western countries.

Trump could potentially cite alternative authorities to impose import taxes, though they are more limited. Section 122 of the Trade Act of 1974, for instance, allows the president to tax imports from countries with which the U.S. runs big trade deficits at 15% for 150 days.

Likewise, Section 301 of the same 1974 law allows the president to tax imports from countries found to have engaged in unfair trade practices after an investigation by the Office of the U.S. Trade Representative. Trump used Section 301 authority to launch his first-term trade war with China.

Wiseman and Whitehurst write for the Associated Press. AP writers Mark Sherman and Josh Boak contributed to this story.

WASHINGTON — For all of President Trump’s promises of an economic “golden age,” a spate of weak indicators last week told a potentially worrisome story as the effects of his policies are coming into focus.

Job gains are dwindling. Inflation is ticking upward. Growth has slowed compared with last year.

More than six months into his term, Trump’s blitz of tariff hikes and his new tax-and-spending bill have remodeled America’s trading, manufacturing, energy and tax systems to his liking. He’s eager to take credit for any perceived wins and is hunting for someone else to blame if the financial situation starts to totter.

But as of now, this is not the boom the Republican president promised, and his ability to blame his Democratic predecessor, Joe Biden, for any economic challenges has faded as the world economy hangs on his every word and social media post.

When Friday’s monthly jobs report turned out to be decidedly bleak, Trump ignored the warnings in the data and fired the head of the agency that produces the report.

“Important numbers like this must be fair and accurate, they can’t be manipulated for political purposes,” Trump said on his social media platform, without offering evidence for his claim. “The Economy is BOOMING.”

It’s possible that the disappointing numbers are growing pains from the rapid transformation caused by Trump and that stronger growth will return — or they may be a preview of even more disruption to come.

A political gamble

Trump’s aggressive use of tariffs, executive actions, spending cuts and tax code changes carry significant political risk if he is unable to deliver middle-class prosperity. The effects of his new tariffs are still several months away from rippling through the economy, right as many Trump allies in Congress will be campaigning in the midterm elections.

“Considering how early we are in his term, Trump’s had an unusually big impact on the economy already,” said Alex Conant, a Republican strategist at Firehouse Strategies. “The full inflationary impact of the tariffs won’t be felt until 2026. Unfortunately for Republicans, that’s also an election year.”

The White House portrayed the blitz of trade frameworks leading up to Trump’s tariff announcement Thursday as proof of his negotiating prowess. The European Union, Japan, South Korea, the Philippines, Indonesia and other nations that the White House declined to name agreed that the U.S. could increase its tariffs on their goods without doing the same to American products. Trump simply set rates on other countries that lacked settlements.

The costs of those tariffs — taxes paid on imports to the U.S. — will be most felt by American consumers in the form of higher prices, but to what extent remains uncertain.

“For the White House and their allies, a key part of managing the expectations and politics of the Trump economy is maintaining vigilance when it comes to public perceptions,” said Kevin Madden, a Republican strategist.

Just 38% of adults approve of Trump’s handling of the economy, according to a July poll by the Associated Press-NORC Center for Public Affairs. That’s down from the end of Trump’s first term when half of adults approved of his economic leadership.

The White House paints a rosier image, casting the economy as emerging from a period of uncertainty after Trump’s restructuring and repeating the economic gains seen in his first term before the pandemic struck.

“President Trump is implementing the very same policy mix of deregulation, fairer trade, and pro-growth tax cuts at an even bigger scale — as these policies take effect, the best is yet to come,” White House spokesman Kush Desai said.

Hints of trouble

The economic numbers over the last week show the difficulties that Trump might face if the numbers continue on their current path:

— Friday’s jobs report showed that U.S. employers have shed 37,000 manufacturing jobs since Trump’s tariff launch in April, undermining prior White House claims of a factory revival.

— Net hiring has plummeted over the last three months with job gains of just 73,000 in July, 14,000 in June and 19,000 in May — a combined 258,000 jobs lower than previously indicated. On average last year, the economy added 168,000 jobs a month.

— A Thursday inflation report showed that prices have risen 2.6% over the year that ended in June, an increase in the personal consumption expenditures price index from 2.2% in April. Prices of heavily imported items, such as appliances, furniture and toys and games, jumped from May to June.

— On Wednesday, a report on gross domestic product — the broadest measure of the U.S. economy — showed that it grew at an annual rate of less than 1.3% during the first half of the year, down sharply from 2.8% growth last year.

“The economy’s just kind of slogging forward,” said Guy Berger, senior fellow at the Burning Glass Institute, which studies employment trends. “Yes, the unemployment rate’s not going up, but we’re adding very few jobs. The economy’s been growing very slowly. It just looks like a ‘meh’ economy is continuing.”

Attacks on the Fed

Trump has sought to pin the blame for any economic troubles on Federal Reserve Chair Jerome Powell, saying the Fed should cut its benchmark interest rates — even though doing so could generate more inflation.

Trump has publicly backed two Fed governors, Christopher Waller and Michelle Bowman, for voting for rate cuts at Wednesday’s meeting. But their logic is not what the president wants to hear: They were worried, in part, about a slowing job market.

But this is a major economic gamble being undertaken by Trump and those pushing for lower rates under the belief that mortgages will also become more affordable as a result and boost homebuying activity.

His tariff policy has changed repeatedly over the last six months, with the latest import tax numbers serving as a substitute for what the president announced in April, which provoked a stock market sell-off. It might not be a simple one-time adjustment as some Fed board members and Trump administration officials argue.

‘Universal tariffs’

Of course, Trump can’t say no one warned him about the possible consequences of his economic policies.

Biden, then the outgoing president, did just that in a speech in December at the Brookings Institution, saying the cost of the tariffs would eventually hit American workers and businesses.

“He seems determined to impose steep, universal tariffs on all imported goods brought into this country on the mistaken belief that foreign countries will bear the cost of those tariffs rather than the American consumer,” Biden said. “I believe this approach is a major mistake.”

Boak and Rugber write for the Associated Press.

WASHINGTON — President Trump’s tariff onslaught this week left a lot of losers — from small, poor countries such as Laos and Algeria to wealthy U.S. trading partners such as Canada and Switzerland. They’re now facing especially hefty export taxes — tariffs — on the products they export to the U.S. starting Thursday.

The closest thing to winners may be the countries that succumbed to Trump’s demands — and avoided even more pain. But it’s unclear whether anyone will be able to claim victory in the long run — even the United States, the intended beneficiary of Trump’s protectionist policies.

“In many respects, everybody’s a loser here,’’ said Barry Appleton, co-director of the Center for International Law at the New York Law School.

Barely six months after he returned to the White House, Trump has demolished the old global economic order. Gone is one built on agreed-upon rules. In its place is a system in which Trump himself sets the rules, using America’s enormous economic power to punish countries that won’t agree to one-sided trade deals and extracting huge concessions from the ones that do.

“The biggest winner is Trump,” said Alan Wolff, a former U.S. trade official and deputy director-general at the World Trade Organization. “He bet that he could get other countries to the table on the basis of threats, and he succeeded — dramatically.’’

Everything goes back to what Trump calls “Liberation Day’’ — April 2 — when the president announced “reciprocal’’ taxes of up to 50% on imports from countries with which the United States ran trade deficits and 10% “baseline’’ taxes on almost everyone else.

He invoked a 1977 law to declare the trade deficit a national emergency that justified his sweeping import taxes. That allowed him to bypass Congress, which traditionally has had authority over taxes, including tariffs — all of which is now being challenged in court.

‘Winners’ still paying higher tariffs

Trump retreated temporarily after April announcement triggered a rout in financial markets and suspended the reciprocal tariffs for 90 days to give countries a chance to negotiate.

Eventually some of them did, acceding to Trump’s demands to pay what four months ago would have seemed unthinkably high tariffs to maintain their ability to sell to the vast American market.

The United Kingdom agreed to 10% tariffs on its exports to the United States — up from 1.3% before Trump amped up his trade war with the world. The U.S. demanded concessions even though it had run a trade surplus, not a deficit, with the U.K. for 19 straight years.

The European Union and Japan accepted U.S. tariffs of 15%. Those are much higher than the low-single-digit rates they paid last year, but lower than the tariffs he was threatening — 30% on the EU and 25% on Japan.

Also cutting deals with Trump and agreeing to hefty tariffs were Pakistan, South Korea, Vietnam, Indonesia and the Philippines.

Even countries that saw their tariffs lowered from April without reaching a deal are still paying much higher tariffs than before Trump took office. Angola’s tariff, for instance, dropped to 15% from 32% in April, but in 2022 it was less than 1.5%.

And while the Trump administration cut Taiwan’s tariff to 20% from 32% in April, the pain will still be felt by a U.S. ally that China claims as its territory.

“Twenty percent from the beginning has not been our goal. We hope that in further negotiations we will get a more beneficial and more reasonable tax rate,” Taiwan’s President Lai Ching-te told reporters in Taipei on Friday.

Trump also agreed to reduce the tariff on the tiny southern African kingdom of Lesotho to 15% from the 50% he’d announced in April, but the damage may already have been done there.

Brazil, Canada, Switzerland

Countries that didn’t knuckle under — and those that found other ways to incur Trump’s wrath — got hit harder.

Even some of the poor were not spared. Laos’ annual economic output comes to $2,100 per person and Algeria’s $5,600 — versus America’s $75,000. Nonetheless, Laos got rocked with a 40% tariff and Algeria with a 30% levy.

Trump slammed Brazil with a 50% import tax largely because he didn’t like the way it was treating former Brazilian President Jair Bolsonaro, a close Trump ally who is facing trial for trying to overturn his electoral loss and inspiring a riot in the capital in 2023 — recalling Trump’s role in the Jan. 6. insurrection two years earlier at the U.S. Capitol.

Never mind that the U.S. has exported more to Brazil than it’s imported every year since 2007.

Trump’s decision to plaster a 35% tariff on long-standing U.S. ally Canada was partly designed to threaten Ottawa for saying it would recognize a Palestinian state in light of the humanitarian crisis in the Gaza Strip. Trump is a staunch supporter of Israeli Prime Minister Benjamin Netanyahu.

Switzerland was clobbered with a 39% import tax — even higher than the 31% Trump announced on April 2.

“The Swiss probably wish that they had camped in Washington’’ to make a deal, said Wolff, now a senior fellow at the Peterson Institute for International Economics. “They’re clearly not at all happy.’’

Fortunes may change if Trump’s tariffs are upended in court. Five American businesses and 12 states are suing the president, arguing that his April 2 tariffs exceeded his authority under the 1977 law.

In May, the U.S. Court of International Trade, a specialized court in New York, agreed and blocked the tariffs, although the government was allowed to continue collecting them while its appeal wends its way through the legal system, and may end up at the Supreme Court. In a hearing Thursday, the judges on the U.S. Court of Appeals for the Federal Circuit sounded skeptical about Trump’s justifications for the tariffs.

“If [the tariffs] get struck down, then maybe Brazil’s a winner and not a loser,’’ Appleton said.

$2,400 bill for U.S. households

Trump portrays his tariffs as a tax on foreign countries. But they are actually paid by import companies in the U.S. who typically pass along the cost to their customers via higher prices. True, tariffs can hurt other countries by forcing their exporters to cut prices and sacrifice profits — or risk losing market share in the United States.

But economists at Goldman Sachs estimate that overseas exporters have absorbed just one-fifth of the rising costs from tariffs, while Americans and U.S. businesses have picked up the most of the tab.

Walmart, Procter & Gamble, Ford, Best Buy, Adidas, Nike, Mattel and Stanley Black & Decker have all raised prices due to U.S. tariffs.

“This is a consumption tax, so it disproportionately affects those who have lower incomes,” Appleton said. “Sneakers, knapsacks … your appliances are going to go up. Your TV and electronics are going to go up. Your video game devices, consoles are going to up because none of those are made in America.’’

Trump’s trade war has pushed the average U.S. tariff from 2.5% at the start of 2025 to 18.3% now, the highest since 1934, according to the Budget Lab at Yale University. And that will impose a $2,400 cost on the average household, the lab estimates.

“The U.S. consumer’s a big loser,″ Wolff said.

Wiseman writes for the Associated Press. AP writer Christopher Rugaber contributed to this report.