A federal appeals court ruled that most of the sweeping tariffs President Trump imposed on goods from around the globe are illegal. But the judges put their decision on hold until Oct. 14 to give Trump the chance to ask the Supreme Court to weigh in, creating the judicial equivalent of a cliffhanger finale before the next season begins.

The 7–4 decision by the judges of the Court of Appeals for the Federal Circuit strikes at the heart of the president’s economic agenda, upholding a ruling by the Court of International Trade that struck down the tariffs. The appeals court held that Trump overstepped his powers under the International Emergency Economic Powers Act by imposing the import duties.

“The statute bestows significant authority on the president to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax,” the decision said.

If it stands, the ruling would apply to…the baseline tariffs of 10% on almost every country, the higher “reciprocal duties” on countries with a trade imbalance with the US, and additional tariffs on imports from China, Canada, and Mexico that were imposed over what the administration considers their failure to stop the flow of fentanyl into the US. It would not apply to the tariffs Trump has placed on cars and metals, which were issued under a different law.

The appeals court’s decision was a victory for the small businesses and Democrat-led states that brought suits challenging the tariffs, claiming that there was no emergency to justify the use of the emergency law for the tariffs.

But the White House is expected to appeal to SCOTUS and said it would prevail before the nation’s highest court. “If allowed to stand, this decision would literally destroy the United States of America,” Trump said on Truth Social.

Bottom line: Although the tariffs remain in effect for now, the ruling adds even more uncertainty to the global economy, which had already been roiled by Trump’s introduction of the duties.—AR

Trump moves to cut $4.9b in foreign aid funds without Congress. Congress previously approved the funds for foreign aid programs, but the administration is using an untested legal maneuver known as a “pocket rescission” to try to cancel them without Congressional approval. The Impoundment Control Act gives the president authority to halt the release of congressionally earmarked funds for 45 days, but they must be released if Congress doesn’t vote to rescind them during that period. Now, the administration is invoking it with less than 45 days left before the end of the government’s fiscal year in hopes of not having to release the cash. Democrats, and even some Republicans, criticized the move as an unlawful end-run around Congress’s power of the purse. The move is likely to complicate budget negotiations next month to avoid a government shutdown.

Alibaba wants to fill China’s Nvidia-sized hole with new chip. In the latest salvo in the race between the US and China for AI supremacy, China’s Alibaba has developed a new chip that’s more sophisticated than anything it has released before, as American chips from Nvidia are hard to come by in China due to export restrictions and geopolitical tensions, the Wall Street Journal reported yesterday. It still probably doesn’t rival Nvidia’s AI capabilities, however, as CNBC later reported that the chip is designed for running AI applications, not for training them, which requires huge amounts of data. Still, Alibaba’s stock soared on the news.

Judge isn’t ready to decide whether Lisa Cook can keep her job for now. A federal judge heard more than two hours of arguments yesterday about whether the Federal Reserve governor President Trump has tried to fire over allegations of mortgage fraud should be able to continue in her role while her suit challenging the dismissal plays out—but didn’t rule on the pressing question for the central bank. The judge, who asked probing questions of both Cook’s attorney and the government’s, has asked for more written arguments to be submitted to her by Tuesday. The outcome of the case, which is likely to ultimately end up before the Supreme Court, could shift the balance of power between the president and the historically independent Fed.—AR

Like the frustration of trying to buy a bottle of wine at a self-checkout, AI-powered drive-thru ordering at Taco Bell has pushed customers to the brink, and it’s got the chain reassessing its use of the technology. Taco Bell’s Chief Digital and Technology Officer Dane Mathews admitted to the Wall Street Journal this week that the restaurant has realized a bot taking orders from hungry drivers may not be the best idea.

Taco Bell has added drive-thru AI-powered ordering to 500+ locations since last year, and in March, it announced a partnership with Nvidia to help supercharge the use of the tech in its chalupa-making process. While Mathews said the AI has managed to take over 2 million orders successfully, some big blunders involving messed-up orders and customers deliberately messing with the AI have gone viral:

• In one video, an AI agent repeatedly asks the customer what they want to drink—even though the diner already ordered a Mountain Dew.
• Another video shows someone trying to order 18,000 cups of water before the tech cuts out and a (seemingly) annoyed worker jumps on to see what the heck these hooligans are doing.

Big picture: McDonald’s, Wendy’s, and White Castle have all attempted to roll out similar AI ordering with mixed results. The tech is especially limited when locations get busy, according to Taco Bell’s Mathews.—MM