Mirroring President Donald Trump’s on-again, off-again international tariff gyrations, a federal appeals court pressed pause on a lower court ruling that struck down many of the president’s trade levies less than a day after the decision was issued.
On Thursday afternoon, the U.S. Court of Appeals for the Federal Circuit granted a temporary hold on a ruling issued Wednesday evening by the U.S. Court of International Trade, deciding that the “permanent injunctions entered by the Court of International Trade in these cases are temporarily stayed until further notice while this court considers the motions papers.”
Per the appeals court, the plaintiffs in the lower court case have until June 5 to respond to the stay decision and Trump’s legal team will have until June 9 to develop its argument for the pause to remain in place as the appeals process plays out.
In a ruling issued late Wednesday, the trade court struck down a wide swath of trade tariff decrees by President Donald Trump since he took office, finding the president overstepped his authority with the international levies.
The ruling, should it stand, impacts new tariffs Trump has issued, without congressional approval, under the International Emergency Economic Powers Act.
A three-judge panel for the U.S. Court of International Trade said Congress has exclusive authority to set and regulate international commerce and that authority is not superseded by a president’s emergency powers declaration.
“The court does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage,” the panel wrote in its ruling, per Reuters. “That use is impermissible not because it is unwise or ineffective, but because (federal law) does not allow it.”
The ruling was in response to two lawsuits, one filed by a group of small retailers who argued their businesses had been harmed by the tariffs, and another group of 12 Democratic states. The judges gave the Trump administration 10 days to issue new orders reflecting the permanent injunction. Trump lawyers filed a notice of appeal immediately following the decision.
Which tariffs are impacted by the ruling?
Ahead of the stay, the trade court’s decision halted the current blanket tariff of 10% on most import goods coming into the U.S., a 30% tariff on Chinese goods and 25% tariffs on goods from Canada and Mexico not covered by the United States-Mexico-Canada Agreement.
The ruling does not impact other sector-specific tariffs issued by Trump including current levies of 25% on imported autos, auto parts, steel and aluminum, CNN reported. Those trade levies were issued under Section 232 of the Trade Expansion Act — a different law than the one Trump cited for his broader trade actions.
“We won — the state of Oregon and state plaintiffs also won,” Ilya Somin, a law professor at George Mason University’s Scalia Law School and the plaintiffs’ lawyer, said to CNN immediately after the ruling. “The opinion rules that entire system of liberation day and other IEEPA (International Emergency Economic Powers Act) tariffs is illegal and barred by permanent injunction.”
On April 2, Trump issued a raft of new trade levies including a blanket 10% tariff on all foreign imports and additional reciprocal tariffs on dozens of countries, some as high as 50%, that were assessed on nations identified as having significant trade inequities or barriers.
A week later, the president announced a 90-day pause on the reciprocal levies but kept the 10% blanket tariff in place. At the same time he also upped the import fees on most Chinese import goods to 145%. On May 12, following talks between U.S. and Chinese trade officials, Trump announced he was rolling China import levies back to 30% for 90 days.
Earlier, Trump had declared new tariffs on Canada, Mexico and China aiming to quell the flow of illicit drugs and illegal immigration across U.S. borders.
The tariff tumult has led to ongoing volatility in U.S. and global investment markets and cast a cloud of uncertainty over business operators who have been left without a clear vision of how to plan for the impacts of trade fees.
All of those new levies were issued under authority Trump claimed under the International Emergency Economic Powers Act, but the trade court judges disagreed.
“(International Emergency Economic Powers Act) does not authorize any of the worldwide, retaliatory, or trafficking tariff orders,” the panel of judges wrote in their ruling Wednesday. “The worldwide and retaliatory tariff orders exceed any authority granted to the president by (International Emergency Economic Powers Act) to regulate importation by means of tariffs. The trafficking tariffs fail because they do not deal with the threats set forth in those orders.”
What the White House had to say
In a statement, White House spokesperson Kush Desai argued trade deficits have created a state of national emergency for the U.S. and the trade court’s decision to invalidate Trump’s tariff strategy superseded its jurisdiction.
“Foreign countries’ nonreciprocal treatment of the UnitedW States has fueled America’s historic and persistent trade deficits,” Desai said. “These deficits have created a national emergency that has decimated American communities, left our workers behind, and weakened our defense industrial base — facts that the court did not dispute.
“It is not for unelected judges to decide how to properly address a national emergency. President Trump pledged to put America First, and the administration is committed to using every lever of executive power to address this crisis and restore American greatness.”
Following the stay on Thursday, Jeffrey Schwab, a lawyer for the business plaintiffs, said he was confident his clients would ultimately prevail.
“This is merely a procedural step as the court considers the government’s request for a longer stay pending appeal,” Schwab said in a statement. “We are confident the federal circuit will ultimately deny the government’s motion shortly thereafter, recognizing the irreparable harm these tariffs inflict on our clients.”
Trump trade advisor Peter Navarro told reporters Thursday that the effort to move forward with the tariffs would continue, even if the administration loses this round of the legal battle.
“Even if we lose, we will do it another way,” Navarro said.