White House grapples with whiplash legal rulings hitting heart of Trump's economic agenda

CNN

3 days ago

For a White House that has grown accustomed to a rollercoaster of legal rulings, judicial decisions over the past day throwing President Donald Trump's tariff plans into question landed like a bombshell.
The rulings – which strike at the heart of Trump's economic agenda – represent far more of a threat to his priorities, White House officials said, than many other court opinions over the last four months since Trump returned to office. And perhaps no fight will prove as consequential to the president's agenda — at home and abroad — as the effort now underway by Trump and his administration to rescue his tariff policy after it was imperiled by a relatively obscure tribunal this week.
The day after the US Court of International Trade — a panel housed in a boxy glass building in Lower Manhattan — ruled Trump lacked the authority to apply the sweeping sky-high tariffs under federal emergency powers, the president and his team quickly moved to have the ruling frozen. The administration blasted the Wednesday night decision, which was reached by a three-judge panel appointed by Trump, Barack Obama and Ronald Reagan.
Trump's team was successful; by Thursday afternoon, a federal appeals court in Washington had preserved the tariffs on an administrative basis, buying the White House time.
In the interim, there was a scramble inside the White House to both identify other authorities that would allow Trump to move ahead with the stiff new duties and to swiftly petition the courts to pause enforcement.
Back-up options could prove cumbersome. Many of the alternative routes would involve lengthy investigations or require approval from Congress, where support for tariffs — even among some Republicans — is lukewarm.
'We're not planning to pursue those right now because we're very, very confident that this really is incorrect,' Trump's top economist Kevin Hassett said early Thursday in a Fox Business interview, before affirming later in the day what other White House officials had been saying: that Trump's team was exploring all its options.
'Heaven forbid, if it ever did have trouble in the future, we've got so many other options on the table that the president's policy is going to be there,' he told reporters in the White House driveway.
Still, it seemed evident that Trump's advisers believed the courts would provide the best resource, even if there was little certainty at how judges will ultimately rule.
'We will respond forcefully, and we think we have a very good case with respect to this,' Trump's hawkish trade adviser Peter Navarro said following the stay decision.
The whiplash rulings — which joined a string of on-again, off-again tariff moves orchestrated by Trump himself — only seemed to emphasize the degree of chaos that continues to color Trump's trade agenda.
The tariffs were restored only temporarily, leaving foreign trade partners and investors in a state of limbo at least until June 9, the date by which the Justice Department must respond to those challenging the duties.
The ultimate fate of Trump's prized tariffs, both a lynchpin of his wider economic agenda and the motivating force of his foreign policy, has now been thrust into deep uncertainty.
And the prospects of the roughly 18 trade deals that the administration has said are being negotiated under threat of withering new tariffs — including three in their final stages, according to White House officials — now appear unclear.
The legal and trade fights, which are now fully intertwined, present one of the biggest challenges yet for the administration – further complicated by urgent efforts to push the Senate to advance its budget and tax bill. Taken together, Trump faces a multi-front battle that could well define his presidency.
Trump lashed out at the judiciary in a lengthy Thursday evening Truth Social post, taking aim at the three judges from the Court of International Trade. 'How is it possible for them to have potentially done such damage to the United States of America? Is it purely a hatred of 'TRUMP?' What other reason could it be?'
Hours earlier, White House press secretary Karoline Leavitt had struck a similar tone, attacking 'unelected judges' ahead of the stay decision.
'America cannot function if President Trump, or any president for that matter, has their sensitive diplomatic or trade negotiations railroaded by activist judges.'
Trump remained behind closed doors Thursday, but did hold a meeting with Federal Reserve chairman Jerome Powell, whom he has sharply criticized for not lowering interest rates. Powell has also expressed concern Trump's tariffs could lead to higher inflation and lower economic growth.
The president's long-standing belief in tariffs has not been shaken, officials said, despite the series of legal, political and economic setbacks.
While Trump has repeatedly argued that tariffs will make the United States wealthy, the counterargument that import taxes will be paid by consumers has made his sales pitch far more difficult. And businesses are begging for a sense of certainty and a consistent policy.
It was a coalition of small business owners and 12 states that challenged the legality of the Trump tariffs before the US Court of International Trade.
'We brought this case because the Constitution doesn't give any president unchecked authority to upend the economy,' Oregon Attorney General Dan Rayfield said in a statement.
'We're very confident in our case,' said Jeffrey Schwab, a senior counselor at the Liberty Justice Center, which represented the small business owners who filed suit. 'The Trump administration is asserting a vast unilateral authority that is not supported in the law.'
As for the uncertainty abroad, Treasury Secretary Scott Bessent argued Thursday night that trade negotiations with international partners haven't been affected.
'They are coming to us in good faith and trying to complete the deals before the 90-day pause ends,' he told Fox News. 'We've seen no change in their attitude in the past 48 hours. As a matter of fact, I have a very large Japanese delegation coming to my office first thing tomorrow morning.'
But some US trading partners tread cautiously in their response.
'We will study this ruling of the US Federal Courts on reciprocal tariffs closely and note that they may be subject to further legal processes through the courts,' said Australia's trade minister Don Farrell, who was careful not to get ahead of ongoing judicial review.
'You will have to bear with us,' said a spokesman for India's Ministry of External Affairs when questioned about the court ruling. India remains in intensive discussions with the Trump administration on a trade deal.
Still, the leader of one nation that has borne the brunt of Trump's trade agenda was more receptive.
'The government welcomes yesterday's decision,' Canada's Prime Minister Mark Carney, who held a stiffly cordial meeting with Trump earlier this month, told his country's parliament, calling the tariffs 'unlawful as well as unjustified.'