The Trump administration is still talking with trading partners, even after the US appeals court ruled most of Trump's tariffs illegal, US Trade Representative Jamieson Greer said Sunday.

"Our trading partners, they continue to work very closely with us on negotiations," he said in an interview on Fox News' "Fox & Friends" program. "People are moving forward with their deals, regardless of what this court may say in the interim."

A federal appeals court ruled on Friday that most of President Trump's global tariffs were illegal. The ruling explains the president exceeded his authority in using emergency powers to impose them.

The judges allowed the tariffs to stay in place as the case continues to be adjudicated in a lower court. Friday's decision from the US Court of Appeals for the Federal Circuit reaffirms an earlier ruling by the Court of International Trade.

Trump responded to the decision on Truth Social, saying "ALL TARIFFS ARE STILL IN EFFECT!" He also called the court "Highly Partisan" and said "with the help of the United States Supreme Court, we will use [tariffs] to benefit our nation."

The case is expected to eventually make it to the US Supreme Court, and the Trump administration can now decide whether to appeal.

It means the "reciprocal" tariffs Trump unveiled on dozens of US trade partners (which you can see in the graphic below) now face a fresh bout of legal limbo.

Meanwhile, Brazilian President Luiz Inacio Lula da Silva has authorized plans to retaliate against the 50% US tariffs imposed by President Trump, though the Brazilian leader emphasized he is looking to negotiate with the US administration.

Separately, the $800 duty-free loophole ended Friday, with small imported packages to the US facing tariffs of 10% to 50%, depending on their origin.

Mexico plans to raise tariffs on Chinese goods under its 2026 budget to protect local industries. The move comes amid US pressure, as Trump has claimed cheap Chinese products are entering Mexico before heading north.

Also, Trump's 50% tariffs on India have now kicked in, a move that experts say could upend a decades-long push by Washington to forge closer ties with New Delhi. Trump added an extra 25% tariff on Indian imports because of the country's purchase of Russian oil.

Chinese President Xi Jinping and Indian Prime Minister Narendra Modi met in Tianjin on Sunday, pledging closer ties as both face steep US tariffs.

The unfolding situations with both India and Mexico are the latest examples of how Trump's tariffs are pushing countries to choose sides between the US and China.

Read more: What Trump's tariffs mean for the economy and your wallet

Here are the latest updates as the policy reverberates around the world.

A federal appeals court struck down most of President Trump's Congress-averting global import tariffs Friday in a dispute that's predicted to head to the US Supreme Court.

The 7-4 ruling, issued by 11 judges for the US Court of Appeals for the Federal Circuit in Washington, D.C., allows the tariffs to remain in place while the administration decides on an appeal to the US Supreme Court.

The decision upholds a ruling handed down in May by the US Court of International Trade (CIT), saying that the president lacked legal authority to order, by way of executive orders, a series of global tariffs imposed on US trading partners. [...]

The court emphasized that under the US Constitution, Congress is empowered to lay and collect taxes, duties, imposts, and excises and to regulate commerce with foreign nations.

\\"Tariffs are a tax, and the framers of the Constitution expressly contemplated the exclusive grant of taxing power to the legislative branch,\\" the ruling said.

Read more here.

Indian Prime Minister Narendra Modi visited China for the first time in seven years to hold talks with Chinese President Xi Jinping. The two discussed how the two countries will work to cooperate in the face of an ongoing trade war with the United States.

Bloomberg reports:

Chinese President Xi Jinping and Indian Prime Minister Narendra Modi held their first meeting since Donald Trump returned to power, with the longstanding Asian rivals pledging deeper cooperation as they deal with the economic fallout from the US trade war.

Modi announced the resumption of direct flights between the two countries, and said ties in the past year have stabilized after soldiers pulled back from the friction points on the border. The two met at the port city of Tianjin on the sidelines of the Shanghai Cooperation Organisation summit, a security-focused bloc co-founded by China.

China and India should not let border issues define their relationship, Xi told Modi, adding that the “right choice” is to be friends. “As long as the two countries remain partners rather than rivals, and see each other as development opportunities rather than threats, China-India relations will flourish and move forward steadily,” Xi was quoted as saying by the Chinese news agency Xinhua.

Read more from Bloomberg here.

Yahoo Finance senior columnist Rick Newman writes:

Businesses have been hoping for clarity as President Trump’s trade war enters its eighth month. Instead, they’re getting more confusion and prolonged uncertainty as legal challenges upend a fundamental premise of the whole scheme. [...]

Trump has used the emergency justification to impose import taxes at a far faster pace than he did during his first term. Emergency tariffs account for 78% of the new tariff revenue importers are paying, according to the Tax Foundation. So if the Supreme Court strikes them down for good, Trump will basically have to start over as he tries to rewire the global trading system.

He also notes that the appeals court left the duties in place until October to allow the Supreme Court time to weigh in. Until then, however, it's not clear what businesses can — or should — do.

Some US importers will probably postpone shipments until then, to avoid forking over customs duties they may not have to pay later. Importers typically have to pay tariffs when they receive a shipment, regardless of whether they think they can recoup the higher cost by passing it onto their own customers. Imports have been highly erratic this year, surging and collapsing as windows open for averting Trump’s tariffs, then close.

Read more here.

Reuters reports:

China's trade representative Li Chenggang visited the United States from August 27-29, holding discussions with U.S. officials on bilateral economic and trade relations, the Chinese commerce ministry said on Saturday.

Li met with representatives from the U.S. Department of the Treasury, Department of Commerce, and Office of the U.S. Trade Representative to exchange views on the implementation of prior agreements.

Li said both sides should manage differences and expand cooperation through equal dialogue and consultation.

Read more here.

Bloomberg reports:

Indian Prime Minister Narendra Modi toured a chip factory in Japan’s Miyagi prefecture on Saturday, a day after he and his Japanese counterpart Shigeru Ishiba pledged deeper ties as US tariffs hit the global economy.

“We hope to work together to strengthen the semiconductor supply chain and enhance economic security,” said Ishiba, speaking to reporters after the visit. [...]

The pledge for closer ties comes as India explores a shift in its geopolitical balance and seeks to shore up support from friendly nations after relations with the US took a downturn. As part of that shift, Modi will travel to China for the first time in seven years after his trip to Japan, and is expected to meet with leader Xi Jinping.

Japan, whose key car industry has been hit hard by President Donald Trump’s tariffs, is also looking to boost trade with like-minded nations as it seeks to tap into India’s vast market and young demographic.

Read more here.

Bloomberg reports on some troubles on the US-Japan trade front:

Japan’s top trade negotiator Ryosei Akazawa abruptly canceled his trip to Washington on Thursday because there remains a gap between the two sides on the issue of rice, Nikkei reported.

Japanese officials are unhappy that a US presidential order would include plans for Japan to increase purchases of American rice and a reduction of tariffs on agricultural products, the report said Friday. Japan objects to the order that would be sent to US government agencies as some points have not been resolved, Nikkei said, citing unidentified Japanese officials.

Akazawa said on Friday that he expects to visit the US at least once more before the Trump administration issues an executive order that would formally lower tariffs on goods imported from Japan. Japanese staff are currently in the US discussing the matters with their US counterparts, he said, adding it has become clear that more administrative talks were needed.

Read more here.

The Associated Press examines what may happen from here — both on the legal front and on the broad implications if the Supreme Court does ultimately end up invalidating the duties.

So where does this leave Trump's trade agenda?

The government has argued that if Trump's 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. Revenue from tariffs totaled $159 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.

It could also put Trump on shaky ground in trying to impose tariffs going forward.

“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.

Trump does have alternative laws for imposing import taxes, but they would limit the speed and severity with which he could act. For instance, in its decision in May, the trade court noted that Trump retains more limited power to impose tariffs to address trade deficits under another statute, the Trade Act of 1974. But that law restricts tariffs to 15% and to just 150 days on countries with which the United States runs big trade deficits.

Read more here.

A wide swath of President Trump's tariffs were shot down by a federal appeals court on Friday, which found the administration's use of emergency economic powers to impose reciprocal tariffs on nearly every US trading partner overstepped the powers granted by that law.

The Trump administration had argued that a president can unilaterally impose wide-ranging, global tariffs by invoking a law enacted in 1977 to protect the US from international threats known as “IEEPA” — the International Economic Emergency Powers Act

IEEPA authorizes the president to “regulate” international commerce after declaring a national emergency.

Tariffs imposed by the administration under Section 232 rules, which includes categories like steel and aluminum imports, will not be impacted by this ruling.

Imports to the US surged in July, widening the US trade deficit 22.1% to $103.6 billion last month, the Census Bureau said on Friday.

Imports of goods jumped $18.6 billion to $281.5 billion, while goods exports dipped $0.1 billion to $178 billion.

The effect of the growth in imports could drag on economic growth in the third quarter.

More from Reuters:

An ebb in import flows led to a sharp contraction in the trade deficit in the second quarter, which added a record 4.95 percentage points to gross domestic product growth that period.

The economy grew at a 3.3% annualized rate last quarter. GDP contracted at a 0.5% rate in the January-March quarter, weighed down by a sharp deterioration in the trade deficit that was driven by businesses front-running imports at a record pace before President Donald Trump's sweeping tariffs kicked in.

The Atlanta Federal Reserve is currently estimating GDP will increase at a 2.2% rate in the third quarter.

Read more here.

Yahoo Finance reporter Emma Ockerman looks into the de minimis exemption, which is ending on Friday, and its effects on businesses and consumers:

Last week, the women’s shoe brand Zou Xou offered consumers a “pre-tariff” sale of 10% to 50% off, warning that prices were set to rise. Similarly, the activewear brand Girlfriend Collective said in an Aug. 21 email blast about a sale that “in nine days our prices get a little higher, but we still promise to make sustainable, high-quality clothes you can wear for years.”

The timing of the discounts hit as a loophole allowing cheaper imported packages to avoid steep levies comes to an end.

“I just framed it as an opportunity to save before the deadline,” said Katherine Theobalds, the Buenos Aires-based founder of Zou Xou. She manufactures and ships her artisanal leather shoes from Argentina, which has been hit with 10% tariffs.

The de minimis exemption allowed millions of shipments into the US each day duty-free if they were valued at or below $800.

But President Trump announced in late July that he would eliminate the policy, effective Friday. That decision, which sent direct-to-consumer companies and small businesses scrambling, subjects smaller imported parcels to tariffs moving forward, though gifts of less than $100 between individuals will not be taxed.

Read more here.

Bloomberg reports:

Caterpillar Inc. (CAT) is warning investors that it’s now expecting tariffs to have an impact of as much as $1.8 billion on the company this year, higher than its guidance in early August.

“While the company continues to take initial mitigating actions to reduce this impact, trade and tariff negotiations continue to be fluid,” Caterpillar said Thursday in a regulatory statement.

The company said it expects the net impact from incremental tariffs introduced this year to be $500 million to $600 million in the third quarter, and $1.5 billion to $1.8 billion for the full year.

Read more here.

Brazil's Vice President Geraldo Alckmin said Thursday that President Luiz Inacio Lula da Silva has authorized retaliation against President Trump's 50% tariffs.

A source added that the US will be officially notified on Friday, confirming a report from Brazilian newspaper O Estado de S. Paulo.

Bloomberg News reports:

The plan, an initial step designed to encourage talks before escalating a trade war, was discussed during a meeting between Lula and cabinet ministers on Wednesday, the person said.

“I hope this helps accelerate dialogue and negotiation,” Alckmin said.

Brazil’s Chamber of Foreign Trade now has as many as 30 days to analyze the US measures and determine whether they fall under the reciprocity law passed by Congress earlier this year. If the chamber approves, a group of ministries will study which countermeasures to apply.

Read more here.

Global grain traders are closely watching the US-China talks for any insight on agricultural tariffs. The outcome could be key for American farmers trying to regain access to their top export market.

Reuters reports:

Senior Chinese trade negotiator Li Chenggang is visiting Washington this week for talks with U.S. officials.

WHY DOES AGRICULTURE MATTER FOR TIES?

Farm products are the biggest U.S. export to China and a commitment by Beijing to increase purchases is likely to feature in a broad trade deal. President Donald Trump has already urged it to quadruple soybean purchases.

But looming over the talks is the memory that parts of the 2020 \\"Phase 1\\" deal, struck during Trump's first term, went unfulfilled, in particular a commitment by Beijing to buy an additional $200 billion worth of U.S. goods over 2020 and 2021.

Read more here.

The US's relationships with India and Mexico highlight how President Trump's trade disputes are starting to polarize nations.

Yahoo Finance's Ben Werschkul reports:

President Trump’s trade wars are increasingly forcing countries to choose between the US and its main adversaries, China and Russia.

It’s a theme that has been evident for months but has been on heightened display this week, with headlines from India to Mexico underscoring that nations are not necessarily destined to choose the US.

On one side is India, which is now facing 50% US tariffs on an array of goods. Those duties are set to be felt in everything from textiles to solar panels in part due to the country’s continued purchases of Russian oil.

But a US pressure campaign to stop those purchases has, for now at least, clearly pushed India toward US adversaries.

Read more here.

On Thursday, the European commission proposed removing tariffs on US industrial goods, a step that could trigger a retroactive cut in US tariffs on European cars. President Trump has already agreed to cut tariffs on cars built in the European Union but this latest move by the EU could be seen as a way to speed this up.

Reuters reports:

The proposal is the first step in enacting the framework agreement between U.S. President Donald Trump and Commission President Ursula von der Leyen on July 27, which saw the EU accept a broad 15% tariff to avoid a damaging trade war.

The United States has agreed to reduce its tariffs on cars built in the European Union to 15% from 27.5% from the first day of the month in which the EU's legislative proposal is presented - meaning from August 1.

Read more here.

A Canadian boycott in protest of the Trump administration's tariffs is hitting Jack Daniel's maker Brown-Forman (BF-B, BF-A) hard.

Brown-Forman's sales in Canada fell sharply by 60% as the distiller called out \\"significant headwinds\\" due to the US-Canada trade dispute.

In March, most Canadian provinces, including Ontario, Quebec, and British Columbia, retaliated against President Trump's tariffs on Canadian goods by pulling US liquor from retail locations. Only two provinces, Alberta and Saskatchewan, have since put US liquor back on shelves.

\\"Canada's organic net sales declined nearly 60% as beverage alcohol products produced in the United States remained off the shelves in the majority of the Canadian provinces,\\" Brown-Forman CEO Lawson Whiting said in the company's earnings call. \\"While our non-U.S. brands, such as Diplomatico and El Jimador, continued to deliver growth, they were not able to offset the decline of our brands that are produced in the US.\\"

Tens of thousands of small businesses in India are rushing to find new buyers in markets across Europe, Africa and Asia in order to lessen the impact of President Trump's 50% tariffs on exports to the US, which came into effect on Wednesday.

Reuters reports:

Firms also front-loaded shipments earlier in August ahead of the August 27 deadline, sending out existing orders before tariffs were doubled from the 25% import tax imposed by US President Donald Trump in July.

Over 50,000 exporters among India's nearly 60 million small enterprises, spanning sectors including textiles, jewelry and chemicals, face the tariff spike but the government has yet to announce any financial or credit support for those affected.

It has instead urged exporters to find alternative markets.

\\"The sense we are getting is that a lot of the times we try to actually sell to the US because we get better pricing. But there are a lot of other markets and it is those markets that are now going to come into focus,\\" said Vinod Kumar, president of the India SME Forum.

Read more here.

Bloomberg News reports:

HP Inc. gave a profit outlook for the current quarter that was in line with expectations, but investors remain concerned about the impact of economic uncertainty and higher costs tied to President Donald Trump’s trade policies.

To cope with the effects of tariffs, HP has adjusted to use manufacturing facilities outside of China for almost all of its products sold in North America, and the company has increased some prices, Chief Executive Officer Enrique Lores said in an interview.

The company was able “mitigate the majority of the tariff costs in Q3, while still delivering EPS slightly above the midpoint of our guide,” Chief Financial Officer Karen Parkhill said in response to analysts’ questions during a conference call after the results were released. “As we’ve said, we do expect to fully offset these trade-related costs as quickly as possible. And the full benefit of our mitigating actions really depending on the scope can take a little bit of time. But again, we expect to fully mitigate as quickly as we can.”

Read more here.

Oil fell on Thursday as traders continued to monitor the situation between the US and India, after President Trump hit New Delhi with 50% tariffs over its purchase of Russian oil.

Bloomberg News reports:

Brent (BZ=F) dropped below $68 a barrel, having traded between $65 and $70 for virtually all of August. White House trade adviser Peter Navarro stepped up the pressure on New Delhi to halt purchases of Russian oil after Washington doubled a levy on imports from the country to 50%. The US has singled out India over Russian crude imports as part of its efforts to end the war in Ukraine.

“Tariffs and sanctions related to Russia, as well as attacks on Russian oil facilities have kept oil prices resilient in the high $60s, despite the looming oversupply that should lower prices,” Citigroup analysts including Anthony Yuen said in a note.

Read more here.

Bloomberg reports that the Mexican government plans to raise tariffs on China as part of its 2026 budget proposal next month. The move is aimed at protecting domestic industries and acquiescing to a request from President Trump.

From Bloomberg:

The tariff hikes, expected for imports including cars, textiles, and plastics, aim to shelter domestic manufacturers from subsidized Chinese competition, according to three people briefed on the matter, who asked not to be identified, revealing details of the plans. Other Asian countries are also expected to face higher tariffs, one of the people said.

Specific tariff rates weren’t immediately clear, and the plan could change, the people said. The draft revenue proposal from President Claudia Sheinbaum’s administration is scheduled to be sent to Congress by Sept. 8.

Read more here.