In a twist straight out of the trade war playbook, a federal appeals court hit the pause button on a lower court’s move to dismantle the broad tariffs imposed during Trump’s tenure. Just a day after a U.S. trade court ruled that the former president had overstepped his legal bounds by unleashing these duties under emergency powers, the appeals court reinstated them temporarily.
The Washington-based appeals court decided to freeze the prior ruling as it digs into the government’s appeal, setting deadlines for responses from both sides in early June. This back-and-forth keeps the fate of these tariffs hanging in the balance, casting a long shadow over global trade talks and rattling markets still trying to steady themselves from tariff turbulence.
The initial ruling had challenged the very core of Trump’s tariff strategy, calling out his use of the International Emergency Economic Powers Act as a constitutional overreach. According to that court, only Congress holds the reins when it comes to levying taxes and tariffs, leaving Trump’s aggressive tariff playbook on shaky ground.
Despite the judicial pushback, Trump’s administration doubled down, signaling they plan to fight tooth and nail, banking on appeals or alternative executive maneuvers to keep the tariffs in place. After all, these duties have been Trump’s signature tool for squeezing leverage in trade negotiations, threatening costly tariffs on imports from nearly every corner of the globe.
Trump himself took to social media to slam the trade court’s “horrible” decision, painting it as a direct assault on presidential authority and a gift to foreign competitors. He warned that allowing Congress to dictate tariffs would forever change the presidency’s power landscape.
Around the world, responses have been measured. The UK called it a purely domestic legal matter, while Canada found affirmation in the ruling, consistent with its stance that the tariffs lacked legal grounds. Other global players stayed mum, awaiting the legal dust to settle.
For businesses caught in the crossfire, the rollercoaster continues. The tariffs have already inflicted billions in lost sales and higher costs, forcing companies to rethink supply chains and shake up long-term strategies. Some sectors, like steel and autos, remain unaffected by this legal back-and-forth due to separate national security measures.
The nonprofit group behind the lawsuit representing small businesses insists the appeals court will eventually side with them, pointing to the tangible harm caused—lost customers, disrupted suppliers, and a survival threat looming over these companies.
As the legal saga unfolds, trade deals remain elusive, and uncertainty looms large. The tariff rate, which had briefly dipped thanks to a temporary truce with China, now stays elevated, keeping markets and manufacturers on edge.
This is more than just a courtroom clash—it’s a high-stakes dance with global commerce, where the steps of law, politics, and economics intertwine, and the outcome remains anyone’s guess.
