U.S. Court of International Trade in New York City, August 22, 2022. Credit – Getty Images
A series of court rulings have thrown the centerpiece of President Donald Trump’s economic agenda into chaos by first blocking the bulk of his sweeping tariffs and then allowing them to resume—at least for now.
Here’s what to know about where the legal battle stands, and where it could go from here.
What have the courts ruled?
Trump was handed a win on Thursday when a federal appeals court ruled in favor of his Administration and paused a Wednesday night ruling from the U.S. Court of International Trade, allowing his tariffs to remain in place for the time being.
A three-judge panel for the trade court had ruled that the President does not have “unbounded authority” to issue tariffs under the International Emergency Economic Powers Act (IEEPA). The 1977 law, which Trump drew on to levy tariffs against almost every country in the world under national emergencies related to fentanyl and trade deficits, enables the President to oversee economic transactions in the case of a national emergency, such as during an “unusual and extraordinary threat” to the economy, foreign policy, or national security.
The ruling halted a 30% tariff on China, a 25% tariff on certain goods from Mexico and Canada, and 10% baseline tariffs on most of the rest of the world, but did not affect import taxes on steel, aluminum, or automakers, which Trump levied under a different law.
The Administration swiftly appealed, and the Thursday decision to grant its emergency motion has temporarily reinstated the tariffs that were halted while the appeals court considers the case.
Adding to the confusion of the back-and-forth rulings, a federal judge issued a ruling in a separate case earlier on Thursday to bar the Trump Administration from collecting tariffs imposed under IEEPA from two Illinois educational toy companies, but paused his injunction for two weeks. The Administration has appealed that decision as well.
What comes next?
The future of Trump’s tariffs is still in limbo. The appeals court directed the plaintiffs in the case, a group comprised of U.S. businesses affected by the tariffs, to respond to federal officials’ motion to stay the trade court’s ruling by June 5. The federal government must then respond by June 9.
The appeals process could ultimately reach as far as the Supreme Court, where the Trump Administration had previously said it would pursue “emergency relief” should the lower court not reinstate the President’s tariff powers.
The levies Trump has imposed under IEEPA have also been challenged in several other lawsuits.
Prior to the reinstatement of the blocked tariffs, White House Press Secretary Karoline Leavitt told reporters at a press briefing on Thursday that the President had “other legal authorities” he could use to impose import taxes on foreign countries.
Leavitt did not specify further, but the U.S. Court of International Trade itself named another law that grants the President limited power to impose tariffs in its ruling. Section 122 of the Trade Act of 1974, it noted, allows the President to levy tariffs of up to 15% for as long as 150 days in response to “fundamental international payment problems,” including “large and serious balance-of-payments deficits,” and unfair trading practices.
Trump has himself used other laws to impose import taxes in both of his terms. His steel, aluminum, and auto tariffs, for instance, draw on his authority under Section 232 of the Trade Expansion Act of 1962, which empowers the President to put tariffs in place in response to national security threats.
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