A federal appeals court has temporarily reinstated President Donald Trump’s tariffs, just a day after a trade court ruled that he had overstepped his authority. This ruling from the U.S. Court of Appeals for the Federal Circuit in Washington puts a hold on the lower court’s decision while the government appeals it. The court has set deadlines for the plaintiffs to respond by June 5 and for the administration by June 9.
The earlier ruling from the U.S. Court of International Trade was unexpected and could have delayed or even blocked Trump’s tariffs on imports from many countries, as well as additional tariffs on goods from Canada, Mexico, and China. These tariffs were part of Trump’s strategy to combat the flow of fentanyl into the U.S.
The trade court’s three-judge panel stated that the Constitution grants Congress, not the president, the power to impose taxes and tariffs. They found that Trump had exceeded his authority by using the International Emergency Economic Powers Act, which is meant for national emergencies.
Despite the trade court’s decision, senior officials in Trump’s administration expressed confidence that they would win on appeal or find other ways to implement the tariffs. The tariffs have raised concerns among various sectors, including the insurance industry, which has been assessing the potential impacts on businesses and consumers.
Trump has used these tariffs as leverage in trade negotiations, a tactic that the trade court ruling could disrupt. Upcoming negotiations with Japan and India were not affected by the ruling, as they are still scheduled to proceed.
Responses from U.S. trading partners have been cautious. The British government referred to the trade court’s ruling as a domestic issue for the U.S. Canadian Prime Minister Mark Carney welcomed the ruling, viewing it as a validation of Canada’s stance against the tariffs.
Financial markets reacted with a mix of optimism and caution to the trade court’s decision, although the appeals process could take time. Analysts noted that uncertainty about the future of the tariffs remains, especially since they have already cost U.S. companies over $34 billion in lost sales and increased costs.
Some tariffs, particularly those on steel, aluminum, and automobiles, were imposed under different authorities and were not affected by the ruling. The Liberty Justice Center, representing small businesses challenging the tariffs, sees the appeals court’s stay as a procedural step but believes it highlights the potential harm to businesses.
Earlier on the same day, another federal court also found that Trump had overstepped his authority regarding tariffs on goods from certain countries. However, that ruling was narrower and only affected the toy company that brought the case.
As the situation develops, the trade court’s ruling could alter the landscape of U.S. trade and negotiations, leaving many businesses and trading partners watching closely.