Appeals Court Reinstates Trump Tariffs, Overturning Lower Court's Block on Sweep

In a swift and significant legal maneuver, a U.S. federal appeals court has temporarily reinstated the broad tariffs imposed by President Donald Trump, overturning a lower trade court's ruling that had deemed them an overreach of presidential authority. This decision means that the controversial import duties, which have impacted global trade and raised concerns about consumer prices, will remain in effect for now as the legal battle continues.
The dramatic turn of events unfolded rapidly. Just yesterday, Wednesday, May 28, 2025, the U.S. Court of International Trade (USCIT) in New York delivered a major blow to Trump's economic policies. A three-judge panel of the USCIT ruled that the President had overstepped his authority by invoking the 1977 International Emergency Economic Powers Act (IEEPA) to declare a national emergency and impose sweeping tariffs on imports from nearly every country in the world. The court emphasized that the U.S. Constitution grants Congress exclusive powers to regulate commerce with other nations, a power not superseded by the President's remit to safeguard the economy through such broad tariff measures.
The USCIT's ruling specifically targeted the "Liberation Day" tariffs, announced by Trump on April 2, which included a blanket 10% tariff on most U.S. trading partners, as well as higher duties of 25% on certain goods from Mexico and Canada, and 30% on China, citing issues like trade deficits and the flow of drugs. The lower court's decision was seen as a significant setback for the administration, threatening to halt or delay these widespread tariffs and casting fresh uncertainty over the future of U.S. trade policy. Plaintiffs in the case, including several small businesses and a coalition of U.S. states, had argued that the IEEPA did not authorize the use of tariffs and that a trade deficit did not constitute a national emergency justifying such sweeping action.
However, the Trump administration swiftly appealed the USCIT's decision. Late yesterday, Thursday, May 29, 2025, the U.S. Court of Appeals for the Federal Circuit granted an emergency motion to temporarily stay the lower court's ruling. This temporary reinstatement allows the administration to continue collecting the tariffs under the emergency powers law while the appeals court considers the motions papers and the merits of the case. The appeals court cited the potential impact on national security as a reason for granting the stay.
This rapid reversal means that for businesses and consumers, the current tariff regime remains largely unchanged for the foreseeable future. Importers will continue to pay the duties, and the prices of affected consumer goods are likely to reflect these additional costs. The legal challenge to Trump's tariffs, which has involved at least seven lawsuits, is widely expected to ultimately reach the U.S. Supreme Court, indicating a prolonged and complex legal process.
It is important to note that the USCIT's ruling did not affect all of Trump's tariffs. Tariffs imposed under Section 232 of the Trade Expansion Act of 1962, such as the 25% taxes on most imported autos and parts, as well as on all foreign-made steel and aluminum, remain in place. These tariffs were justified on national security grounds after investigations by the Commerce Department and fall under a different legal authority. The trade court also acknowledged that the President retains more limited power to impose tariffs of up to 15% for 150 days to address trade deficits under Section 122 of the Trade Act of 1974.
The temporary reinstatement of the tariffs has drawn mixed reactions. While the administration views it as a necessary step to maintain its trade agenda and leverage in ongoing negotiations, critics argue that the continued imposition of these tariffs creates economic uncertainty, inflates prices, and disrupts global supply chains. Financial markets, which had shown some guarded optimism after the initial lower court ruling, will now likely remain cautious as the appeals process unfolds.
The legal battle over the extent of presidential power in trade policy is far from over. The appeals court's decision to temporarily reinstate the tariffs signals that the courts recognize the complexity and potential ramifications of an immediate cessation of these duties. However, the initial ruling from the Court of International Trade highlighted a significant challenge to the legal foundation of some of Trump's most far-reaching trade actions, and the ultimate fate of these tariffs will hinge on future judicial rulings.

Source@BBC