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Post Reply: Trump Tarrifs Remain in Effect as Appeals Court Grants Stay

<blockquote><div class="quotetitle">Quote from <a class="profile-link highlight-moderator" href="https://lawguide.co.ke/understanding-law/legal-forum/profile/lawyer/">Lawyer</a> on June 12, 2025, 5:33 am</div><div id="pl-6352"  class="panel-layout" ><div id="pg-6352-0"  class="panel-grid panel-no-style" ><div id="pgc-6352-0-0"  class="panel-grid-cell"  data-weight="1" ><div id="panel-6352-0-0-0" class="so-panel widget widget_sow-editor panel-first-child panel-last-child" data-index="0" data-style="{&quot;background_image_attachment&quot;:false,&quot;background_display&quot;:&quot;tile&quot;,&quot;background_image_size&quot;:&quot;full&quot;,&quot;background_image_opacity&quot;:&quot;100&quot;,&quot;border_thickness&quot;:&quot;1px&quot;}" ><div
			
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	<p dir="ltr" data-pm-slice="0 0 []">In a significant development for U.S. trade policy, a federal appeals court has ruled that President Donald Trump’s sweeping tariffs, including the so-called “Liberation Day” tariffs on imports from most U.S. trading partners and additional duties on Canada, China, and Mexico, can remain in effect while legal challenges are resolved. The decision, issued by the U.S. Court of Appeals for the Federal Circuit on June 10, 2025, temporarily pauses a lower court’s ruling that had declared these tariffs unlawful, granting the Trump administration a reprieve in its aggressive trade strategy.</p>
<p dir="ltr">The tariffs at the center of this legal battle were imposed under the authority of the International Emergency Economic Powers Act (IEEPA), a 1977 law historically used to impose sanctions or freeze assets during national emergencies. President Trump, the first U.S. president to invoke IEEPA for tariffs, justified the levies by citing trade imbalances and, in the case of Canada, China, and Mexico, allegations of facilitating illegal fentanyl trafficking into the U.S.—claims denied by the three nations. The “Liberation Day” tariffs, announced on April 2, 2025, targeted imports from nearly all U.S. trading partners, while additional duties were placed on specific countries to address trade deficits and other concerns.</p>
<p dir="ltr">On May 28, 2025, the U.S. Court of International Trade in Manhattan delivered a unanimous ruling that these tariffs exceeded presidential authority. The three-judge panel, which included one Trump appointee, argued that the U.S. Constitution grants Congress, not the president, the power to regulate commerce and impose tariffs. The court issued a permanent injunction, blocking the tariffs and threatening to disrupt Trump’s trade agenda, which relies heavily on tariffs as leverage in negotiations with global partners.</p>
<p dir="ltr">The Trump administration swiftly appealed the trade court’s decision, and on May 29, 2025, the Federal Circuit granted a temporary stay, allowing the tariffs to remain in place. The latest ruling on June 10 extends this pause, ensuring that the tariffs: estimated to maintain an average effective U.S. tariff rate of 15%, continue while the appeals process unfolds. The court deemed the case of “exceptional importance,” opting to have the full 11-member panel hear arguments on July 31, 2025, rather than a standard three-judge panel.</p>
<p dir="ltr">The tariffs have been a cornerstone of Trump’s trade policy, aimed at bolstering domestic manufacturing, raising revenue, and securing more favorable trade deals. However, their on-again, off-again nature has created significant uncertainty for businesses and markets. Companies across industries have struggled to manage supply chains, production, staffing, and pricing amid fluctuating trade policies, with estimates suggesting the tariffs have already cost businesses over $34 billion in lost sales and higher costs.</p>
<p dir="ltr">The legal battle hinges on the interpretation of IEEPA, which Trump’s administration argues grants the president broad authority to regulate trade during national emergencies, such as persistent trade deficits. Critics, including small businesses and 12 U.S. states led by Democratic attorneys general, contend that IEEPA does not authorize tariffs and that Trump’s actions infringe on Congress’s constitutional authority. Jeffrey Schwab, an attorney representing small businesses like educational toy makers Learning Resources Inc. and hand2mind, expressed disappointment with the appeals court’s decision but remained optimistic, stating, “Every court to rule on the merits so far has found these tariffs unlawful, and we have faith that this court will see that IEEPA does not allow the president to impose whatever tax he wants whenever he wants.”</p>
<p dir="ltr">The White House, through spokesman Kush Desai, welcomed the stay, asserting that the administration is “legally using the powers granted to the executive branch to address national emergencies of persistent goods trade deficits and drug trafficking.” The administration has signaled its readiness to pursue other legal avenues or appeal to the Supreme Court if necessary, emphasizing the tariffs’ role in ongoing trade negotiations.</p>
<p dir="ltr">Financial markets have reacted with cautious optimism to the reinstatement of the tariffs, though volatility persists. The S&amp;P 500 rose 0.4% on May 29, 2025, following the initial stay, but analysts warn that the uncertainty surrounding the appeals process could continue to unsettle investors. George Lagarias, chief economist at Forvis Mazars, noted that the stay provides “time to prepare” but caps the effective tariff rate at 15% for now, a reduction from the 27% peak following the “Liberation Day” announcement.</p>
<p dir="ltr">The tariffs have strained relations with U.S. trading partners, many of whom have responded cautiously. The British government described the issue as a U.S. domestic matter, while Germany and the European Commission declined to comment. Canadian Prime Minister Mark Carney called the trade court’s initial ruling “consistent with Canada’s longstanding position” that the tariffs were unlawful. Meanwhile, India, facing a 27% reciprocal tariff, has signaled a willingness to negotiate rather than retaliate, offering to reduce tariffs on $23 billion in U.S. imports.</p>
<p dir="ltr">Despite a temporary truce with China reducing tariffs on Chinese goods until late summer, broader trade negotiations remain challenging. The Trump administration has secured only one trade deal, with Britain, while agreements with other partners, such as Japan, remain elusive. Analysts suggest that the uncertainty of the appeals process may deter countries from rushing into deals, complicating Trump’s goal of striking “90 deals in 90 days.”</p>
<p dir="ltr">As the Federal Circuit prepares to hear arguments in July, the fate of Trump’s tariffs remains uncertain. The administration’s reliance on IEEPA has drawn scrutiny, with multiple lawsuits challenging its use. A parallel ruling in a Washington, D.C., district court also found the tariffs unlawful, though its impact was limited to two small businesses. No court has yet upheld Trump’s claim of unlimited emergency tariff authority, raising questions about the long-term viability of his trade strategy.</p>
<p dir="ltr">For now, the tariffs remain in place, allowing the Trump administration to continue leveraging them in trade talks. However, the legal and economic fallout continues to ripple through global markets and supply chains. As businesses brace for potential disruptions and trading partners weigh their options, the outcome of this high-stakes legal battle will shape the future of U.S. trade policy and its role in the global economy.</p>
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