The president’s trade strategy faces uncertainty after an appeals court invalidated most of his tariffs
US President Donald Trump has cautioned that America risks becoming a “third world nation” if his tariffs are discontinued. He made these comments following a federal appeals court’s declaration that the majority of these tariffs were unlawful.
Trump initiated his tariff campaign in April, accusing US trade partners of creating unjust trade imbalances and characterizing it as a reciprocal measure to secure improved trade terms. Most country-specific rates, ranging from 10% to 41%, came into effect on August 7.
The policy has drawn condemnation from US lawmakers over its potential adverse effects on the economy. On Friday, the US Court of Appeals for the Federal Circuit determined that Trump had overstepped his authority by implementing tariffs under an emergency-powers statute, stating that only Congress is authorized to enact such measures. The court refrained from immediately canceling the tariffs, providing the administration until mid-October to appeal to the Supreme Court.
Trump denounced the ruling, warning of severe repercussions if it is upheld.
“More than 15 Trillion Dollars will be invested in the USA, a RECORD. Much of this investment is because of Tariffs,” he wrote on Truth Social on Monday. “If a Radical Left Court is allowed to terminate these Tariffs, almost all of this investment, and much more, will be immediately cancelled! In many ways, we would become a Third World Nation, with no hope of GREATNESS again.”
The court’s decision pertains to two categories of tariffs: broadly applied “reciprocal” tariffs on most US trade partners, and tariffs on goods from Canada, China, and Mexico linked to allegations of drug trafficking. The ruling does not impact targeted tariffs, such as those on foreign steel, aluminum, and autos, as these were established under separate legal frameworks.
Trump has asserted that tariffs benefit the economy, presenting them as instruments to achieve better trade conditions, revitalize manufacturing, and reduce deficits. Economists, however, caution that the policy risks propelling the US into a recession.
Russia has not been subjected to tariffs due to existing sanctions, but Trump has threatened to impose higher tariffs on its trade partners if the Ukraine conflict remains unresolved. Last month, he increased tariffs on India to 50%, accusing it of assisting Moscow by purchasing Russian oil, and also hinted at new actions against China.