Trump has used the threat of charging US importers costly tariffs for goods from almost every other country in the world as leverage in international trade talks, a strategy the trade court's ruling would upend. The trade court ruling had not interfered with any negotiations with top trading partners that are scheduled in the days ahead, Trump's administration said.
Trump wrote in a statement shared on social media that he hoped the US supreme court would “reverse the horrible, country threatening decision” of the trade court, while lambasting the judicial branch of government as anti-American.
“The horrific decision stated I would have to get the approval of Congress for the tariffs,” Trump wrote on Thursday night.
“If allowed to stand, this would completely destroy presidential power — the presidency would never be the same. The decision is being hailed all over the world by every country, other than the US.”
Many US trading partners offered careful responses. The British government said the trade court's ruling was a domestic matter for the US administration and noted it was “only the first stage of legal proceeding”. Germany and the European Commission, the EU's executive arm, said they could not comment on the decision.
Canadian Prime Minister Mark Carney said the trade court's finding was “consistent with Canada's long-standing position” that Trump's tariffs were unlawful.
Financial markets, which have whipsawed in response to the twists and turns in Trump's chaotic trade war, reacted with cautious optimism to the trade court ruling, though gains in stocks on Thursday were largely limited by expectations that the court's ruling faced a potentially lengthy appeals process. Analysts said broad uncertainty remained regarding the future of Trump's tariffs, which have cost companies more than $34bn (R607bn) in lost sales and higher costs, according to a Reuters analysis.
Some sector-specific tariffs, such as on imports of steel, aluminium and automobiles, were imposed by Trump under separate authorities on national security grounds and were unaffected by the ruling.
The Liberty Justice Center, the nonprofit group representing five small businesses that sued over the tariffs, said the appeals court's temporary stay was a procedural step.
Trump’s tariffs to remain in effect after appeals court grants stay
A federal appeals court temporarily reinstated the most sweeping of President Donald Trump's tariffs on Thursday, a day after a US trade court ruled that he had exceeded his authority in imposing the duties and ordered an immediate block on them.
The US court of appeals for the federal circuit in Washington said it was pausing the lower court's ruling to consider the government's appeal, and ordered the plaintiffs in the cases to respond by June 5 and the administration by June 9.
Wednesday's surprise ruling by the US court of international trade had threatened to kill or at least delay the imposition of Trump's Liberation Day tariffs on imports from most US trading partners and additional tariffs on goods from Canada, Mexico and China. The latter was related to his accusation that the three countries were facilitating the flow of fentanyl into the US
The trade court's three-judge panel ruled the constitution gave Congress, not the president, the power to levy taxes and tariffs, and that the president had exceeded his authority by invoking the International Emergency Economic Powers Act, a law intended to address threats during national emergencies.
Senior Trump administration officials had said they were undeterred by the trade court's ruling, saying they expected either to prevail on appeal or employ other presidential powers to ensure the tariffs go into effect.
Trump has used the threat of charging US importers costly tariffs for goods from almost every other country in the world as leverage in international trade talks, a strategy the trade court's ruling would upend. The trade court ruling had not interfered with any negotiations with top trading partners that are scheduled in the days ahead, Trump's administration said.
Trump wrote in a statement shared on social media that he hoped the US supreme court would “reverse the horrible, country threatening decision” of the trade court, while lambasting the judicial branch of government as anti-American.
“The horrific decision stated I would have to get the approval of Congress for the tariffs,” Trump wrote on Thursday night.
“If allowed to stand, this would completely destroy presidential power — the presidency would never be the same. The decision is being hailed all over the world by every country, other than the US.”
Many US trading partners offered careful responses. The British government said the trade court's ruling was a domestic matter for the US administration and noted it was “only the first stage of legal proceeding”. Germany and the European Commission, the EU's executive arm, said they could not comment on the decision.
Canadian Prime Minister Mark Carney said the trade court's finding was “consistent with Canada's long-standing position” that Trump's tariffs were unlawful.
Financial markets, which have whipsawed in response to the twists and turns in Trump's chaotic trade war, reacted with cautious optimism to the trade court ruling, though gains in stocks on Thursday were largely limited by expectations that the court's ruling faced a potentially lengthy appeals process. Analysts said broad uncertainty remained regarding the future of Trump's tariffs, which have cost companies more than $34bn (R607bn) in lost sales and higher costs, according to a Reuters analysis.
Some sector-specific tariffs, such as on imports of steel, aluminium and automobiles, were imposed by Trump under separate authorities on national security grounds and were unaffected by the ruling.
The Liberty Justice Center, the nonprofit group representing five small businesses that sued over the tariffs, said the appeals court's temporary stay was a procedural step.
Jeffrey Schwab, senior counsel for the centre, said the appeals court would ultimately agree with the small businesses that faced irreparable harm of “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 the businesses”.
A separate federal court earlier on Thursday also found Trump overstepped his authority in using the International Emergency Economic Powers Act for what he called reciprocal tariffs of at least 10% on goods from most US trading partners and for the separate 25% levies on goods from Canada, Mexico and China related to fentanyl.
That ruling was much narrower, however, and the relief order stopping the tariffs applied only to the toy company that brought the case. The administration has also appealed that ruling.
After a market revolt after his major tariff announcement on April 2, Trump paused most import duties for 90 days and said he would hammer out bilateral deals with trade partners. But apart from a pact with Britain this month, agreements remain elusive, and the trade court's ruling on the tariffs and the uncertainty of the appeals process may dissuade countries such as Japan from rushing into deals, analysts said.
“Assuming 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 international advisers.
The trade court ruling would have lowered the overall effective US tariff rate to about 6%, but the appellate court's emergency stay means it will remain at about 15%, according to estimates from Oxford Research. That is the level it has been since Trump earlier this month struck a temporary truce that reduced punishing levies on Chinese goods until late summer. By contrast, the effective tariff rate had been between 2% and 3% before Trump returned to office in January. Trump's trade war has shaken makers of everything from luxury handbags and sneakers to household appliances and cars as the price of raw materials has risen. Drinks company Diageo and automakers General Motors and Ford are among those that have abandoned forecasts for the year ahead.
Non-US companies including Honda, Campari, Roche and Novartis have said they are considering moving operations or expanding their US presence to mitigate the impact of tariffs.
Reuters
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