President Donald Trump’s Tariffs Temporarily Reinstated After Appeals Court Issues Stay

On Thursday, a federal appeals court in Washington issued a temporary stay on the U.S. Court of International Trade's decision that had ruled President Donald Trump exceeded his authority in imposing broad import tariffs. The stay allows Trump’s sweeping tariffs to remain in place while the appellate court reviews the government's challenge.

The United States Court of Appeals for the Federal Circuit ordered the plaintiffs to respond by June 5, and the administration by June 9.

The Lower Court’s Disruption and What It Meant

Trade Court Finds Trump Overstepped Authority

In a decision that surprised many, the U.S. Court of International Trade found that President Trump had violated the Constitution by unilaterally imposing the tariffs. The three-judge panel stated that only Congress has the authority to levy tariffs, and the use of the International Emergency Economic Powers Act (IEEPA) in this context was unjustified.

The ruling threatened to halt the so-called "Liberation Day" tariffs on imports from key U.S. trade allies—including Canada, Mexico, and China—where Trump cited fentanyl trafficking as a justification.

White House Reacts to Legal Setback

Trump and Officials Unfazed

Senior Trump officials expressed confidence that the ruling wouldn’t stop the tariffs long-term. They signaled an intention to either win on appeal or use alternative presidential authorities to impose the tariffs.

Trump wrote on social media:

“The horrific decision stated that I would have to get the approval of Congress for these Tariffs,”
“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.”

He also added that he hoped the U.S. Supreme Court would “reverse this horrible, Country threatening decision.”

Global and Market Reactions

Cautious Global Responses

• The UK called the trade court ruling a “domestic matter.”

• Germany and the European Commission refrained from commenting.

• Canada’s Prime Minister Mark Carney welcomed the trade court decision, saying it was “consistent with Canada’s longstanding position” that the tariffs were illegal.

Market Reaction: Optimism Meets Caution

Markets responded with cautious optimism after the trade court ruling, though stock gains were limited due to expectations of a prolonged appeals process. As per a Reuters analysis, Trump’s tariffs have cost businesses over $34 billion in higher expenses and lost revenue.

Legal Nuances and Ongoing Appeals

Appeals Court Stay Considered Procedural

The Liberty Justice Center, which represents five small businesses challenging the tariffs, labeled the appellate court’s action a “procedural step.”
Their lead counsel, Jeffrey Schwab, stated:

“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.”

In a separate case, another federal court also ruled that Trump had overreached by using the IEEPA to enforce reciprocal tariffs of 10% and 25% tariffs on Canada, Mexico, and China. However, the relief applied only to a single toy company, and that case is under appeal too.

Tariff Impact on Economy and Businesses

Tariffs Threaten Global Supply Chains

The impact of tariffs has been widespread, affecting industries ranging from luxury goods to automobiles:

• Diageo, General Motors, and Ford have withdrawn financial forecasts.

• Non-U.S. companies like Honda, Campari, Roche, and Novartis are reassessing operations or considering U.S. expansions to avoid tariff impacts.

Effective Tariff Rate Remains High

• Before Trump’s return in January, the effective U.S. tariff rate hovered around 2–3%.

• It rose to about 15%, especially after Trump reached a temporary tariff truce with China.

• The trade court's ruling would have brought the rate down to 6%, but the appeals court stay keeps it at 15%, according to Oxford Research.

What Lies Ahead?

Deals Still Elusive

Trump had announced a 90-day pause on most duties in April, aiming to negotiate bilateral agreements. While a deal with Britain was signed this month, talks with Japan and other nations remain uncertain—partly due to the ongoing legal drama.

George Lagarias, chief economist at Forvis Mazars, noted:

“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.”

Conclusion: Tariff Policy in Limbo

The appeals court’s intervention buys the Trump administration time, but the broader legal and diplomatic battles are far from over. With multiple lawsuits, appeals, and trade negotiations in motion, the future of Trump’s tariff policy remains uncertain—and global markets are watching closely.