A federal appeals court has granted the Trump administration's request to keep sweeping tariffs in effect, at least temporarily, a significant victory for the president's trade policy as legal challenges continue.
The U.S. Court of Appeals for the Federal Circuit on Tuesday extended its earlier temporary pause of a trade court decision that had found President Trump exceeded his authority in imposing the tariffs, according to Bloomberg.
The court, which has national jurisdiction over trade disputes, indicated it would fast-track its consideration of the case, citing "issues of exceptional importance" at stake. It has scheduled oral arguments for July 31. This means the tariffs are likely to remain in effect for at least the next two months. The losing party is expected to seek review at the Supreme Court.
The appeals court's order did not offer a detailed reason for siding with the administration at this stage, only stating that the government had met its burden for showing that keeping the lower court's injunction on hold was "warranted". No judge noted a dissent from the order. The Justice Department had argued that concerns about ongoing trade negotiations outweighed the economic harm claimed by the small businesses that sued.
The administration also argued that blocking the tariffs would disrupt U.S. diplomacy and intrude upon the president's power to conduct foreign affairs.
The appeals court stepped in after the U.S. Court of International Trade ruled last month that President Trump had misused an emergency law to implement the tariffs. That court had halted the tariffs after siding with five small businesses and a group of Democratic state attorneys general who challenged Trump's actions.
A dozen Democratic-led states also sued the administration. Companies led by New York wine importer V.O.S. Selections Inc. claimed that letting the tariffs go into effect would lead to much higher costs and lower sales, potentially leading some to bankruptcy.
President Trump asserted his authority under the 1977 International Emergency Economic Powers Act (IEEPA) in imposing most of the levies. The tariffs covered by the trade court ruling include his global 10% levy, his April 2 "Liberation Day" tariffs, and measures targeting China, Canada, and Mexico over fentanyl trafficking.
The trade court ruled last month that the IEEPA did not give the president "unbridled tariff power". The court also took issue with Trump's claims of "emergencies" over trade deficits and drug trafficking, stating that government lawyers effectively undercut their position by arguing tariffs were needed as negotiating tools. A panel of trade court judges, appointed by presidents from different parties, wrote that the government's "pressure" argument concedes the direct effect of the tariffs is to burden the target countries.
These tariffs are part of a barrage announced by President Trump since starting his second term, which has sparked a global trade war and threatened to upend the world economy. Global markets have fluctuated significantly since the so-called reciprocal levies were announced in a sweeping executive order on April 2.
The current order comes a month before President Trump's own 90-day pause on most of his sweeping "reciprocal" tariffs is set to expire on July 9. Absent a trade deal or further extension, U.S. tariff rates are set to increase drastically for many nations, with goods from the European Union, for instance, potentially facing a 50% levy.
Tariffs on steel, aluminum, and automobiles, which were imposed under a different law, were not affected by the trade court ruling or the subsequent appeals court decision. Administration officials have publicly suggested that most tariffs could be imposed by other means even if the IEEPA basis was blocked.
Article edited by Joseph Chen
