WASHINGTON (CP) – A federal appeals court granted President Donald Trump‘s request to temporarily maintain emergency tariffs after two lower courts ruled the administration overstepped its authority, creating uncertainty for USA businesses and international trade negotiations during ongoing legal challenges to the president’s signature economic policy.
The U.S. Court of Appeals for the Federal Circuit on Thursday allowed the government to continue collecting tariffs under the International Emergency Economic Powers Act (IEEPA) while the administration appeals two separate court decisions that blocked the president’s sweeping trade measures. The emergency ruling came after the U.S. Court of International Trade struck down most of Trump’s universal tariffs on Wednesday, followed by a second federal court decision on Thursday that also found the president exceeded his authority.
The trade court invalidated Trump’s 10 percent universal tariff on all imports and higher rates for specific countries, claiming the president overstepped constitutional authority that gives Congress exclusive power to regulate international commerce. The three-judge panel, which included appointees from Reagan, Obama, and Trump administrations, ruled that the 1977 emergency powers law does not grant “unbounded authority” to impose worldwide import duties. The decisions affect ongoing negotiations with multiple nations including China, Canada, Mexico, and European Union members.
White House officials expressed confidence they will prevail on appeal, with spokeswoman Karoline Leavitt stating the administration expects “to fight this battle all the way to the Supreme Court.” The Justice Department had warned it would seek emergency relief from the nation’s highest court as early as Friday if the appellate court had not granted the temporary stay. White House spokesperson Kush Desai rejected the trade court’s authority, declaring that “it is not for unelected judges to decide how to properly address a national emergency.”
The legal challenges emerged from lawsuits filed by multiple states and private businesses, including toy importers Learning Resources and hand2mind, who argued the tariffs posed an “existential threat” to their operations. The Court of International Trade found no clear connection between Trump’s stated goals of combating drug trafficking and the method of charging import duties on legal trade. A separate federal court in Washington also blocked the president’s authority to impose unilateral tariffs in a narrower ruling affecting the toy companies.
Business leaders across the USA have expressed concern about ongoing uncertainty as corporate profits fell by $118 billion in the first quarter of 2025, according to Bureau of Economic Analysis data released Thursday. Major importers including Ford, IBM, and Caterpillar face continued challenges navigating changing trade policies. The National Foreign Trade Council president Jake Colvin warned that “the court ruling basically guarantees uncertainty for the foreseeable future.”
Treasury Secretary Scott Bessent has been conducting trade negotiations with China and more than a dozen other nations under 90-day deadlines established by the president. USA trading partners may feel less urgency about bargaining now that courts have challenged the threat of renewed tariffs. Bernd Lange, chair of the European Parliament’s international trade committee, noted that some tariffs are “not accepted even inside the legal system of the United States.”
The administration maintains that persistent trade deficits represent a national emergency justifying the emergency powers law, while legal experts argue IEEPA was never intended for imposing universal import duties. The president has indicated he may explore alternative legal authorities, including Section 232 national security provisions, to impose tariffs if the current appeals process fails. This could potentially extend trade policy uncertainty for months ahead while negotiations with international partners remain in question. The ongoing political debates surrounding immigration policy and trade enforcement continue to influence business planning across multiple industries.