A federal appeals court has ruled that the majority of President Donald Trump’s international tariffs exceed his legal authority, delivering a major setback to his administration’s unilateral trade strategy.

In a 7-4 decision, the U.S. Court of Appeals for the Federal Circuit concluded that Trump’s imposition of sweeping tariffs violated statutory limits, affirming a lower court’s determination that his actions were “invalid as contrary to law.” The ruling does not take immediate effect, as the court has paused enforcement until mid-October, giving the administration time to appeal to the U.S. Supreme Court.

The court’s majority opinion stated:

“Because we agree that the International Emergency Economic Powers Act does not empower the president to impose the tariffs authorized by the Executive Orders, we affirm the judgment.”

The ruling now places a high-stakes legal showdown before the Supreme Court, potentially setting a precedent on how far a U.S. president can go in shaping trade policy without congressional approval.

If the administration does not secure a reversal from the Supreme Court by October 14, the case will revert to the lower court, which is expected to examine how the high court’s recent ruling on nationwide injunctions may affect the enforcement of this decision. Meanwhile, the contested tariffs remain in place.