A U.S. federal appeals court on Thursday granted President Donald Trump approval to continue collecting tariffs under an emergency powers law for now, while his administration appeals a ruling that struck down much of his flagship economic agenda.
The Court of Appeals for the Federal Circuit granted an emergency motion from the Trump administration arguing that a halt is "critical for the country’s national security."
The short-term relief will allow for an appeals process to proceed, after the Court of International Trade on Wednesday barred most of the tariffs announced since Trump took office, ruling that he had overstepped his authority.
Trump is facing several lawsuits arguing that his "Liberation Day" tariffs exceeded his authority and left the country’s trade policy dependent on his whims.
Since returning to the presidency in January, Trump has moved to reconfigure U.S. trade ties with the world while using levies to force foreign governments to the negotiating table.
But the stop-start tariff rollout, impacting both allies and adversaries, has roiled markets and snarled supply chains.
Prior to Thursday's decision from the U.S. Court of Appeals for the Federal Circuit, known as an administrative stay, the White House was given 10 days to halt affected tariffs.
The Trump administration called the ruling "blatantly wrong," filing an appeal and expressing confidence that the decision would be overturned.
White House spokesperson Karoline Leavitt told reporters that the judges "brazenly abused their judicial power to usurp the authority of President Trump."
Leavitt said the Supreme Court "must put an end" to the tariff challenge, while stressing that Trump has other legal means to impose levies.
Kevin Hassett, director of the National Economic Council, told Fox Business that "hiccups" sparked by the decisions of "activist judges" would not affect talks with trading partners, adding that three deals are close to finalization.
Trump's trade advisor, Peter Navarro, told reporters after the appellate ruling that the administration had received "plenty of phone calls from countries" who said they would continue to "negotiate in good faith," without naming those nations.
Trump's import levies are aimed at punishing economies that sell more to the United States than they buy.
The president has argued that trade deficits and the threat posed by drug smuggling constituted a "national emergency" that justified the widespread tariffs – which the Court of International Trade ruled against.
Trump unveiled sweeping import duties on nearly all trading partners in April, at a baseline 10% – plus steeper levies on dozens of economies, including China and the EU, which have since been paused.
The U.S. trade court's Wednesday ruling quashed these blanket duties, alongside those that Trump imposed on Canada, Mexico and China separately using emergency powers.
But it left intact 25% duties on imported autos, steel and aluminum.
Beijing, which was hit by an additional 145% tariffs before they were temporarily reduced to make space for negotiations, reacted to the trade court decision by saying Washington should scrap the levies.
"China urges the United States to heed the rational voices from the international community and domestic stakeholders and fully cancel the wrongful unilateral tariff measures," said Commerce Ministry spokesperson He Yongqian.
Asian markets rallied Thursday, U.S. indexes closed higher while Europe closed slightly down.
The federal trade court was ruling in two separate cases – brought by businesses and a coalition of state governments – arguing that the president had violated Congress's power of the purse.
The judges said the cases rested on whether the International Emergency Economic Powers Act of 1977 (IEEPA) delegates such powers to the president "in the form of authority to impose unlimited tariffs on goods from nearly every country in the world."
The judges stated that any interpretation of the IEEPA that "delegates unlimited tariff authority is unconstitutional."
Analysts at London-based research group Capital Economics said the case may end up with the Supreme Court, but would likely not mark the end of the tariff war.
