Appellate Court Stay Issued
On 29 May the U.S. Court of Appeals for the Federal Circuit (CAFC) granted a short-term administrative stay of the CIT’s ruling. The administrative stay was issued one day after the CIT ruled that President Trump exceeded his authority by imposing duties under the International Emergency Economic Powers Act (IEEPA). IEEPA tariffs will remain in place through at least June 9.
The CAFC’s new order applies only until it decides whether to grant or deny a long-term stay. It also set a schedule for further briefs on the subject, requiring that the plaintiffs file their brief opposing the Department of Justice (DOJ’s) request by June 5, and DOJ until June 9 to reply. The CAFC’s decision could come at any point after briefings conclude.
Second Federal Court Ruling Against Trump Tariffs
On 29 May, a separate federal court ruling also found that Trump overstepped his authority in using the IEEPA to implement reciprocal tariffs and tariffs on Canada, Mexico and China related to fentanyl. However, the court’s ruling/order only stopped the tariffs applied to the toy company that brought the case. The ruling included a 2-week stay to allow DOJ to appeal.
As one analyst noted, this ruling cites that IEEPA “does not authorize the President to impose tariffs”, which is more far-reaching than the CIT ruling which found that IEEPA does authorize the President to impose tariffs but not with unlimited authority.
What this Means
The issuance of two separate rulings from Federal courts against the use of IEEPA to implement broad tariff action underscores the weak legal position of the Trump Administration. However, the quick pace in which the CIT case was appealed and a stay issued by the CAFC highlights that the tariff environment continues to be dynamic, uncertain, and tariff relief may take longer than expected.
