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The U.S. Court of Appeals for the Federal Circuit has ruled that President Donald Trump had no legal right to impose sweeping tariffs on almost every country. The ruling protects American businesses and consumers from the uncertainty and harm caused by these unlawful tariffs.

The tariffs in question include two sets: the sweeping tariffs announced on April 2, and the "trafficking tariffs" announced on February 1. The sweeping tariffs, also known as "Liberation Day" tariffs, were imposed on countries with trade deficits with the U.S. and a 10% tariff on everyone else. The trafficking tariffs were imposed on imports from Canada, China, and Mexico, with the intention of getting those countries to address illegal drug and immigration flow.

The court challenge largely upheld a May decision by a specialized federal trade court in New York. The U.S. Court of International Trade in New York rejected the argument that the national emergency underlying these tariffs was the long-running trade deficit between the U.S. and the rest of the world. The court also ruled that the trafficking tariffs did not meet the requirement that they "deal with" the problem they were supposed to address.

The Trump administration had argued that courts approved President Richard Nixon's emergency use of tariffs in a 1971 economic crisis, citing the 1917 Trading With the Enemy Act. However, the court found that Trump overstepped his authority under an emergency powers law.

The tariffs, which are the majority of Trump's tariffs imposed under the International Emergency Economic Powers Act (IEEPA) of 1977, remain in effect until mid-October to allow for an appeal to the Supreme Court. If the tariffs are struck down, the government might have to refund some of the import taxes it's collected, potentially causing financial ruin for the U.S. Treasury.

An attorney for small businesses affected by the tariffs said the ruling shows Trump doesn't have unlimited power to impose tariffs on his own. The ruling is a significant victory for those who argue that the emergency power law does not authorize the use of tariffs.

It remains unclear whether businesses will see any effects from the decision. The court challenge does not cover tariffs on foreign steel, aluminum, and autos, or tariffs imposed on China during Trump's first term. The revenue from tariffs now totals $159 billion, more than double what it was at the same point the year before.

President Trump has vowed to appeal the decision, stating that if allowed to stand, it would "literally destroy the United States of America." The appeal will be closely watched as it could set a precedent for the use of emergency powers in future administrations.