Day after being blocked by trade court, Trump's tariffs to remain in effect after appeals court grants stay

Time of India

30-05-2025

In a fast-moving legal reversal, a federal appeals court in Washington reinstated President Donald Trump's expansive tariffs on foreign imports on Thursday, one day after the U.S.
Court of International Trade
ruled that
Trump
had exceeded his authority under emergency powers.
The U.S. Court of Appeals for the Federal Circuit issued a temporary stay on the lower court's decision, allowing the tariffs announced on April 2—labelled by Trump as 'Liberation Day' duties—to remain in effect while the government appeals.
"The request for an immediate administrative stay is granted to the extent that the judgments and 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," the order stated, as reported by The Independent.
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Trade court calls Trump's move unlawful, illegal
The trade court had ruled that Trump unlawfully invoked the 1977 International Emergency Economic Powers Act (IEEPA) to declare a national emergency and impose tariffs on nearly all U.S. trading partners. A three-judge panel concluded that IEEPA, designed for urgent national threats, did not justify sweeping tariffs in response to long-standing trade deficits.
"The reason that he chose IEEPA was he thought he could do this unilaterally without much oversight by
Congress
,' said Jeffrey Schwab, senior counsel at the
Liberty Justice Center
, which represented five small businesses challenging the tariffs. 'The court saw through that.'
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The same ruling also blocked additional tariffs targeting Canada, Mexico, and China, which the administration had linked to the flow of fentanyl into the U.S.
Tariff chaos spurs courtroom battles
Trump's tariffs are being challenged in at least seven legal cases. The trade court's latest ruling came from two combined suits: one brought by five small businesses, the other by a coalition of 12 U.S. states. In a separate case, U.S. District Judge Rudolph Contreras issued a narrower injunction protecting two Illinois-based educational toy companies.
The Liberty Justice Center warned that the businesses it represents faced 'the loss of critical suppliers and customers, forced and costly changes to established supply chains, and, most seriously, a direct threat to the very survival of these businesses,' according to Schwab.
Financial markets responded with guarded optimism following the trade court's ruling, but traders remained cautious as the appeals process unfolds. The reinstatement of tariffs kept the effective U.S. tariff rate near 15%, according to
Oxford Research
, compared to 6% if the lower court's order had held. Before Trump returned to office, tariffs averaged between 2% and 3%.
Trump responds with defiance
Trump dismissed the trade court's ruling in a social media post on Thursday night, framing it as an attack on the presidency itself.
"The horrific decision stated that I would have to get the approval of Congress for these Tariffs," Trump wrote. "If allowed to stand, this would completely destroy Presidential Power — The Presidency would never be the same! This decision is being hailed all over the World by every Country, other than the United States of America."
White House
trade adviser Peter
Navarro
echoed Trump's combative stance, telling reporters that the administration will pursue tariffs 'through other means' if the court challenge fails.
Alternative legal pathways already lined up
Navarro said the administration is prepared to switch to other legal authorities if IEEPA becomes unavailable, including Section 301 for unfair trade practices or Section 232 for national security grounds—both previously used to impose steel and aluminium tariffs. Other rarely used options include Section 122 of the Trade Act of 1974 and Section 338 of the Tariff Act of 1930.
'So you can assume that even if we lose, we will do it another way,' Navarro stated.
Section 122 permits a 15% tariff for 150 days to protect U.S. balance-of-payments or the dollar's value, but an extension would require congressional approval. Section 338, which hasn't been used since the 1940s, allows retaliatory tariffs of up to 50% against countries discriminating against U.S. goods.
'Be careful what you ask for'
As told to Reuters, Dan Ujczo, a U.S.-Canada trade expert at Thompson Hine, said the Trump team could even ask Congress for more tariff power, potentially making the duties more permanent.
'For folks celebrating this opinion, this may be a case of be careful what you ask for,' Ujczo warned.
Former Trump trade adviser Kelly Ann Shaw agreed. 'I think there's plenty of other authority that the administration could use to justify very similar, or, if not the same, measures,' she said. 'And so when I'm talking to companies, clients and governments, I think the safest thing to assume is that these tariffs will still continue to exist in some form, if not the identical one.'
Trump's original April 2 tariff announcement triggered a brief market panic, prompting the White House to delay the steepest duties for 90 days. So far, only a deal with Britain has been finalised; other negotiations remain in limbo. Analysts say the legal uncertainty may make trading partners like Japan more reluctant to enter agreements.
'Assuming that an appeal does not succeed in the next few days, the main win is time to prepare, and also a cap on the breadth of tariffs — which can't exceed 15% for the time being,' said George Lagarias, chief economist at
Forvis Mazars
.
Foreign governments have responded cautiously. The UK government called the legal battle a 'domestic matter.' Germany and the European Commission declined to comment, while Canadian Prime Minister Mark Carney said the ruling was 'consistent with Canada's longstanding position' that the tariffs were unlawful.
Meanwhile, companies continue to feel the pinch. Major brands like Diageo, General Motors, and Ford have dropped financial forecasts for the year. Others, including Honda, Campari, Roche, and
Novartis
, are reportedly considering shifting operations to the U.S. to mitigate the fallout.
Though slowed by the courts, Trump's tariff campaign shows no sign of stopping. As appeals progress, businesses and governments are bracing for the next move.