A recent appellate court ruling has injected fresh uncertainty into U.S. trade policy, just as expectations around presidential authority on tariffs were beginning to stabilize. On Friday, the court determined that former President Donald Trump lacked the constitutional authority to impose import taxes under the International Economic Emergency Powers Act, a legal basis he frequently invoked during his second term to justify broad tariff measures.\n\nThe decision permits existing tariffs to remain active at least until October 14, providing the administration a window to appeal to the Supreme Court—a move analysts anticipate. The legal challenge impacts approximately 75% of the tariffs implemented in recent months, according to research from UBS economists.\n\nIf the Supreme Court ultimately invalidates these tariffs, it could undermine a central component of Trump’s trade strategy, which has raised import duties to levels not seen since the 1930s. With such a significant portion of trade policy now in legal limbo, businesses and consumers face renewed ambiguity when planning investments and expenditures.\n\nShelly Kaushik, senior economist at BMO Capital Markets, described the ruling as adding “yet another layer of tariff uncertainty to kick off September.” Prolonged unpredictability has already influenced corporate behavior, affecting decisions on supply chains, hiring, and facility locations. Some economists argue this hesitation has contributed to a slowdown in employment growth, raising concerns about a potential economic downturn.\n\nThe Federal Reserve has also responded cautiously, maintaining its benchmark interest rate without adjustments while awaiting clarity on trade policy outcomes. This restraint has kept borrowing costs elevated across consumer and business loans.\n\nMark Zandi of Moody’s Analytics suggested that much of the current economic strain stems not from enacted policies but from the uncertainty they generate. In an interview with Newsweek, he noted that businesses are hesitant to act due to unclear policy trajectories, contributing to stalled hiring. Stock markets reacted negatively on Tuesday, reflecting investor concerns over the latest developments.\n— news from Investopedia\n\n— News Original —\nCourt Ruling Against Tariffs Adds Fresh Dose Of Uncertainty To Economic Outlook\nJust when you thought President Donald Trump ‘s trade policy was becoming more predictable, a court ruling has created new uncertainty about the future of U.S. trade policy. n nThe latest twist came Friday when an appeals court ruled that Trump could not impose import taxes using emergency presidential powers under the International Economic Emergency Powers Act. Since taking office for the second time, Trump has used that law to authorize most of the sweeping tariffs he has declared this year. n nThe ruling allowed the tariffs already in place to continue at least through Oct. 14, giving the White House time to appeal the decision to the Supreme Court, as widely expected. n nWhat Does the Tariff Ruling Mean For The Economy? n nThe court battle affects 75% of the wide-ranging tariffs Trump has imposed over the last few months, according to an analysis by economists at UBS. n nShould the Supreme Court overturn the tariffs, it could deal a setback to Trump ‘s controversial ratcheting of import taxes to their highest since the 1930s. And with such a large portion of the nation ‘s trade policy at stake, uncertainty is once again in the air for businesses and individuals making decisions about how to invest or spend money. n nThe decision “adds yet another layer of tariff uncertainty to kick off September,” Shelly Kaushik, a senior economist at BMO Capital Markets, wrote in a commentary. n nUncertainty about tariffs has been a major force in the economy over the last few months. Tariffs affect a multitude of business decisions with potential long-term consequences, including where manufacturers buy materials and parts; how many people employers hire; and where companies may choose to build factories. Economists have said uncertainty about Trump ‘s often-unpredictable trade policy has led to a hiring slowdown that risks dragging the economy into a recession. n nThe uncertainty has also affected interest rates. Officials at the Federal Reserve have held the central bank ‘s key fed funds rate steady this year while waiting to see how the tariff campaign will play out. The Fed ‘s reluctance to cut rates has kept borrowing costs on all kinds of loans higher than they otherwise might be. n nMark Zandi, chief economist at Moody ‘s Analytics, said he believes uncertainty about tariffs and Trump ‘s immigration policies has pushed the economy to the brink of a recession. n n”Most of the damage so far is just the uncertainty that they ‘ve created and which has caused businesses, [and] the Federal Reserve, to kind of sit on their hands,” he told Newsweek in an interview published Tuesday. “And one reason why we have this hiring freeze is just businesses don ‘t know how these policies are going to play out and what it means for them.” n nStocks fell Tuesday amid the fresh uncertainty about tariffs. n nWhat ‘s At Stake