Trump Tariffs Reinstated by Appeals Court, Overturning Lower Court's Block

In a significant legal development that swiftly altered the landscape of U.S. trade policy, a federal appeals court has temporarily reinstated the sweeping tariffs imposed by President Donald Trump, overturning a lower trade court's decision that had sought to block them. This ruling means that the controversial import duties, which have been a hallmark of Trump's economic strategy and a source of contention globally, will remain in effect for the time being as the complex legal battle continues to unfold.
The dramatic turn of events began just yesterday, Wednesday, May 28, 2025, when the U.S. Court of International Trade (USCIT) in New York delivered a substantial blow to Trump's tariff policy. A three-judge panel at the USCIT had ruled that the President had exceeded his constitutional authority by using the 1977 International Emergency Economic Powers Act (IEEPA) to declare a national emergency and subsequently impose broad tariffs on goods from nearly every country. The lower court's reasoning was rooted in the constitutional principle that the power to regulate commerce with foreign nations rests primarily with Congress, a power that, in the USCIT's view, was not superseded by the President's authority under the IEEPA to protect the economy through such extensive tariff measures.
The USCIT's decision specifically targeted what have been dubbed the "Liberation Day" tariffs, which Trump had announced on April 2. These included a blanket 10% tariff on a vast majority of U.S. trading partners, along with higher duties of 25% on certain goods from Mexico and Canada, and an even higher 30% on products from China. The rationale provided by the administration for these tariffs included addressing perceived trade deficits and, in some cases, concerns about the flow of illicit drugs. The lower court's ruling was widely perceived as a major legal setback for the administration, threatening to halt or significantly delay the implementation of these widespread tariffs and introducing a fresh wave of uncertainty into the future of U.S. trade policy. The plaintiffs in the case, including several small businesses and a coalition of U.S. states, had argued that the IEEPA did not grant the President the authority to impose tariffs and that a trade deficit, by itself, did not constitute a national emergency sufficient to justify such a sweeping economic intervention.
However, the Trump administration responded swiftly and decisively, filing an immediate appeal against the USCIT's ruling. Late yesterday, Thursday, May 29, 2025, the U.S. Court of Appeals for the Federal Circuit granted an emergency motion to temporarily stay, or put on hold, the lower court's decision. This temporary reinstatement of the tariffs permits the administration to continue collecting the duties under the emergency powers law while the appeals court thoroughly reviews the submitted motions and the underlying legal merits of the case. The appeals court's rationale for granting this stay reportedly included considerations of potential impacts on national security, indicating a recognition of the broader implications of an immediate halt to the tariffs.
This rapid reversal means that, for businesses engaged in international trade and for consumers, the current tariff regime largely remains in effect for the foreseeable future. Importers will continue to incur the costs associated with these duties, and it is anticipated that the prices of affected consumer goods will continue to reflect these additional expenses. Given the contentious nature of the tariffs and the profound legal questions they raise, the broader legal challenge to Trump's trade policies, which has already encompassed at least seven separate lawsuits, is widely expected to ultimately reach the U.S. Supreme Court, suggesting a protracted and legally intricate process ahead.
It is important to clarify that the USCIT's initial ruling did not encompass all of the tariffs previously imposed by President Trump. For instance, tariffs levied under Section 232 of the Trade Expansion Act of 1962, such as the 25% taxes on most imported automobiles and their components, as well as on all foreign-made steel and aluminum, remain unaffected by this ruling. These specific tariffs were justified on national security grounds following investigations by the Commerce Department and derive their authority from a distinct legal framework. The trade court had also acknowledged that the President retains a more limited power to impose tariffs of up to 15% for a period of 150 days to address trade deficits under Section 122 of the Trade Act of 1974, indicating specific statutory allowances for some tariff actions.
The temporary reinstatement of the tariffs has elicited varied reactions. While the administration views it as a necessary measure to maintain its trade agenda and leverage in ongoing international negotiations, critics continue to argue that the prolonged imposition of these tariffs fosters economic uncertainty, contributes to inflationary pressures, and disrupts complex global supply chains. Financial markets, which had shown a degree of cautious optimism following the initial lower court ruling, will now likely maintain their cautious stance as the appeals process unfolds.
The legal contest over the scope of presidential authority in setting trade policy is far from concluded. The appeals court's decision to temporarily reinstate the tariffs suggests that the judiciary recognizes the inherent complexity and potential far-reaching ramifications of an immediate cessation of these significant duties. Nevertheless, the initial ruling from the Court of International Trade underscored a substantial challenge to the very legal foundation of some of Trump's most ambitious and impactful trade actions, and the ultimate fate of these tariffs will hinge on the outcomes of future judicial deliberations at higher levels of the U.S. court system.
Source@BBC