Tariff Rulings Inject New Uncertainty Into Trump Trade Strategy

Tariff Rulings Inject New Uncertainty Into Trump Trade Strategy

 

A court ruling invalidating President Trump’s sweeping tariffs was halted hours later, throwing into question the administration’s overall approach to trade.

 

Tony RommAna Swanson

By Tony Romm and Ana Swanson

Reporting from Washington and Los Angeles

https://www.nytimes.com/2025/05/29/us/politics/trump-tariffs-trade-policy.html

May 29, 2025

 

A head-spinning series of court rulings over President Trump’s signature tariffs left Washington, Wall Street and much of the world trying to discern the future of U.S. trade policy on Thursday, including whether import taxes would fall meaningfully or if the administration would get the legal green light to upend the global trading system.

 

Less than 24 hours after the U.S. Court of International Trade blocked steep tariffs that Mr. Trump had imposed on trading partners using emergency powers, a separate court temporarily paused that decision, sowing even more chaos on a day filled with economic uncertainty.

 

The extent to which the legal wrangling may ultimately lower tariffs hinges on the next steps from the Trump administration and a series of judges who will further parse the president’s exact powers. Those decisions carry great consequences for the entire global economy, not to mention American consumers and businesses, who could face higher prices if Mr. Trump is allowed to proceed with his aggressive tariff strategy.

 

At the heart of the fight is the president’s use of a decades-old economic emergency law to impose some of his most eye-watering duties, including the minimum 10 percent levy he has placed on nearly every U.S. trading partner. On Wednesday, a panel of judges on the nation’s leading trade court found Mr. Trump had misapplied the law, ruling that Congress did not grant him “unbounded authority” to wage a global trade war.

 

The decision would have forced the Trump administration to unwind many of the president’s steep tariffs over the next 10 days, but the government quickly petitioned a federal appeals court to intervene. It asked a panel of judges to hold that order at bay while it weighed the administration’s fuller arguments that its tariffs were lawful.

 

The appeals court ultimately issued a temporary, administrative pause Thursday afternoon that allowed the government to keep its tariffs in place. The move bought time for judges to begin evaluating the legal core of the president’s arguments in a saga that is expected to reach the Supreme Court.

 

The legal setbacks still did not deter the White House, where top aides signaled the president would not abandon his campaign to use tariffs as a political cudgel. Throughout the day, the administration hinted about other powers at its disposal on trade, a reference to the nearly half a dozen other laws it could use to impose levies.

 

For instance, one of those laws could allow the United States to impose a 15 percent tariff on countries with which it has a trade deficit, a concern that the president frequently cites. But Mr. Trump and his aides long have eschewed those avenues, which typically require more time and preparation than the emergency powers that the president covets and the courts are now reviewing.

 

Asked about the next steps, Kevin Hassett, the director of the National Economic Council, appeared to allude to some of these legal pathways early Thursday. He told Fox Business that the president had “measures” at his disposal.

 

But he acknowledged those approaches would “take a couple of months,” later adding the White House is “not planning to pursue those right now.”

 

For now, the early battery of court rulings cast legal doubt over the centerpiece of Mr. Trump’s trade strategy, which hinges on a novel use of the International Emergency Economic Powers Act. That 1977 law grants the president a set of special powers to confront urgent threats, though it doesn’t explicitly mention tariffs.

 

But Mr. Trump this year became the first president to use that statute to impose a wide range of duties on global imports, including 25 percent tariffs on many goods from Canada and Mexico, and a 30 percent tariff on imports from China.

 

Mr. Trump framed those tariffs as a response to a series of emergencies, including the flow of fentanyl into the United States, which allowed him to invoke the law, known as I.E.E.P.A. He cited the law again when he announced his “reciprocal tariffs” on a wider set of countries, including U.S. allies, citing an urgent need to close the nation’s trade deficit with the rest of the world.

 

Mr. Trump paused those levies almost as soon as he announced them in April after financial markets recoiled. But the president has repeatedly threatened to revive them in a bid to force nations to the negotiating table, with the aim of striking 90 deals in 90 days.

 

On Thursday, many trade experts said the conflicting court rulings could undercut Mr. Trump’s vision by neutering his key source of leverage. For months, he had flaunted a seemingly unfettered ability to impose escalating tariffs as a way to extract concessions from other governments.

 

“After I did what I did, they said, ‘We’ll meet anytime you want,’” Mr. Trump said on Wednesday, referring to his recent threat to impose a 50 percent tariff on the European Union.

 

Trump officials have said they were negotiating trade terms with 18 other countries, all of whom have been eager to avoid those high, reciprocal tariffs from snapping back into effect on their exports in early July. Karoline Leavitt, the White House press secretary, dismissed concerns Thursday that the president had lost the upper hand, arguing that other nations “have faith in the negotiator in chief” and would keep negotiating because they “probably see how ridiculous this ruling is.”

 

Yet even with the threat of tariffs in place, the administration has managed to reach only one “framework” for a trade deal, with Britain. As part of that deal, Britain agreed to open its markets to U.S. beef and ethanol, and the Trump administration said it would pare back tariffs on British cars and steel. But it left in place a 10 percent tariff on British products.

 

The administration has been in discussions for limited trade deals with other nations, including Vietnam and India. Negotiators from the European Union were also in Washington this week, trying to soothe relations after Mr. Trump accused regional leaders of slow-walking a deal.

 

Jamieson Greer, the United States Trade Representative, said in a filing to the Court of International Trade last week that a move to prevent the president from imposing tariffs would inflict “serious damage” on the country’s ability to address national and economic security. He said it would embolden trading partners to “further distort the conditions of competition for U.S. exporters” while creating “a foreign policy disaster scenario.”

 

As the lawsuits play out, Mr. Trump still has “other legal authorities he could potentially use” to enact his trade agenda, said Timothy C. Brightbill, the co-chair of the international trade practice group at the law firm Wiley Rein.

 

Mr. Trump invoked one set of powers, known as Section 232, to establish his tariffs on steel, aluminum and cars earlier this year. Since then, he has sought to use these authorities again to tax imports of pharmaceuticals, semiconductors and other critical products. Those tariffs could be issued imminently, now that the administration has concluded the legally required process of soliciting public comment.

 

On Wednesday, the trade court pointed specifically to another law that it said gave the president authority to impose global tariffs to address trade deficits, one of the reasons Mr. Trump initially stated for announcing his global tariffs in April. Called Section 122, the law permits the president to impose a tariff up to 15 percent on imports for 150 days, a period that can be extended by Congress.

 

There may even be some opportunity for the administration to try again in issuing more limited tariffs under the economic emergency law. Ilya Somin, a professor at George Mason University School of Law who helped represent businesses in one of the tariff lawsuits, said the court struck down Mr. Trump’s claims of “unlimited power” — but left it “ambiguous” as to whether “some tariffs could potentially be done” under the statute known as I.E.E.P.A.

 

White House officials declined on Thursday to specify how, exactly, Mr. Trump plans to proceed as his administration forges ahead with its appeal. The president could also turn to Congress, which can tax imports, though that, too, could take considerable time and delay the trade deals he seeks.

 

“He didn’t like the limits in place. That is why he became the first president ever to try and push these tariffs under the emergency powers,” said Dan Rayfield, the attorney general of Oregon, which led states in one of the lawsuits filed in the Court of International Trade. “He was trying to skirt what Congress had intended.”

 

Tony Romm is a reporter covering economic policy and the Trump administration for The Times, based in Washington.

 

Ana Swanson covers trade and international economics for The Times and is based in Washington. She has been a journalist for more than a decade.