Appeals Court Allows Trump to Maintain All Tariffs While His Legal Challenge is Pending

Victory for Donald Trump in the judicial battle arising from tariffs. The President of the United States can continue applying the import taxes decreed in his trade war against the world. After reviewing the case, the Washington Court of Appeals has decided to uphold the provisional suspension of the implementation of the International Trade Court ruling that annulled those tariffs. The judicial entanglement is not over, but Trump still has his favorite negotiation tool at least until August, beyond the end of the 90-day partial truce he set to sign trade agreements.

The ruling of the United States International Trade Court, the specialized jurisdictional body with competence in the matter, issued on May 28, declared the import tariffs imposed by Trump under an emergency powers law as illegal. The ruling affects the tariffs imposed by Trump on Canada, Mexico, and China, using fentanyl and immigration as pretexts, as well as the misnamed “reciprocal tariffs,” which are temporarily set at 10% for most goods from almost all countries in the world.

The 50% tariffs on aluminum and steel, as well as the 25% tariffs on cars and their components are not affected. They were not subject to the lawsuit and, in addition, were issued under another law, citing national security reasons.

The Court of Appeals decided to urgently suspend the ruling while allowing time for both parties to present their arguments. Both sides did so, and now the judges side with the Trump administration against the plaintiffs: a group of companies and a dozen Democratic states. Their ruling is provisional but indicates that the tariffs remain in effect while the judges decide on the appeal regarding the substance of the matter, which the Trump administration has indicated it plans to present. The judges plan to decide on the case this summer after holding an oral hearing on July 31.

Trump’s team has been working on a plan B for the president to approve the tariffs through a non-emergency pathway if the suspension was not upheld. The judges’ ruling itself reminded that the Trade Act of 1974 grants the president the ability to impose tariffs for a limited period of 150 days with a ceiling of 15% in response to imbalances in the trade deficit.

That would allow in any case to maintain most of the current tariffs while specific country-by-country investigations are carried out to impose tariffs in response to unfair trading practices, as another provision allows. This would require a long and cumbersome process, but it has better legal foundations. It is the pathway Trump used during his first term to impose tariffs on China. He could also impose tariffs citing national security, as he has done with steel and aluminum, for example.

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