Trump's Tariff Power Temporarily Restored After Court Setback

In a dramatic legal turnaround, former US President Donald Trump has received temporary approval to continue imposing tariffs under emergency powers just one day after a federal trade court ruled his sweeping levies were unlawful.

Appeals Court Grants Temporary Reprieve for Contested Tariffs

The US Court of Appeals for the Federal Circuit has put a pause on the lower court’s decision, allowing Trump’s April 2 tariffs to remain in effect while the appeals process plays out.

The court granted an “administrative stay,” which temporarily blocks the enforcement of a prior ruling by the US Court of International Trade (CIT). That ruling found that Trump had overstepped his authority under the 1977 International Emergency Economic Powers Act (IEEPA).

A Blow to Trump's Trade Legacy

The lower court’s decision came in response to lawsuits from five small businesses and a coalition of 12 US states, who challenged the legality of Trump's unilateral tariff hikes.

 Their legal argument: trade imbalances and deficits, which Trump cited as a national emergency, are neither urgent nor unexpected enough to warrant invoking emergency powers, as per news reports.

The tariffs were originally introduced on what Trump dubbed “Liberation Day,” with some duties reaching as high as 50% for countries running trade surpluses with the US. A baseline tariff of 10% was imposed on most others. While steeper tariffs were paused for a 90-day negotiation window, the lighter duties were kept in place.

Mounting Legal Challenges

Trump’s trade strategy has drawn widespread legal scrutiny, with at least seven lawsuits challenging his tariff regime. In addition to the main case, US District Judge Rudolph Contreras issued a separate ruling that blocked tariffs on two educational toy companies based in Illinois, further complicating the legal landscape.

The CIT emphasised that the US has experienced consistent trade deficits for nearly five decades undermining Trump’s claim of a sudden emergency that would justify such sweeping action.

Tariff Uncertainty Lingers

While the tariffs are temporarily back in force, the matter is far from settled. The stay by the appeals court is provisional and will remain until a final decision is made on the administration's appeal. For now, businesses and markets face continued uncertainty as the legal battle over Trump’s trade powers unfolds.

Read More: Nifty Smallcap Index Holds Firm as Sensex and Nifty Slide on Metal, IT Weakness on June 2.

Conclusion

The temporary reinstatement of Trump’s tariff powers marks a significant twist in an ongoing legal saga that could reshape the boundaries of presidential authority on trade.

While the appeals court’s stay offers a brief reprieve for Trump’s trade agenda, the final outcome remains uncertain and could have lasting implications for US. trade policy and global market dynamics. As the legal process unfolds, businesses, investors, and policymakers must prepare for continued volatility and evolving regulatory risks in the trade landscape.

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