What to Know About Trade Court Ruling

By Chris Clayton, DTN Ag Policy Editor and Jerry Hagstrom, DTN Political Correspondent

This article was originally published at 7:06 a.m. CDT on Thursday, May 29. It was last updated with additional information at 3:33 p.m. CDT on Thursday, May 29.

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OMAHA (DTN) -- A federal appeals court on Thursday granted an emergency motion allowing the Trump administration to continue collecting tariffs from other countries while appealing a ruling from the Court of International Trade.

A three-judge panel of the U.S. Court of International Trade ruled late Wednesday that President Donald Trump does not have the authority under economic emergency legislation to impose sweeping global tariffs.

The Trump administration requested an immediate stay of the ruling from the international court from the U.S. Court of Appeals for the Federal Circuit.

"It is critical, for the country's national security and the President's conduct of ongoing, delicate diplomatic efforts, that the Court stay its judgment," the Trump administration filed. "The harm to the conduct of foreign affairs from the relief ordered by the court could not be greater."

In a brief order issued Thursday, the appeals court granted the stay, effectively keeping the tariffs in place for now. Business groups and 12 Democratic-led states would now have until June 5 to respond to the Trump administration's attempt to overturn the international court's ruling.

The three-judge trade court had ruled the administration must to remove a 10% tariff imposed globally as well as other tariffs filed against countries such as Canada, Mexico and China. Those countries are also the three largest buyers of U.S. agricultural products.

Trump imposed tariffs under the 1977 International Emergency Economic Powers Act, or IEEPA, but the court ruled "IEEPA does not authorize any of the worldwide, retaliatory, or trafficking tariff orders." The trade court ruled such tariffs would have to be imposed by Congress, not the president.

The trade court ruling also does not affect specific tariffs on steel, aluminum and imported automobiles issued under a separate law.

The trade court's decision would have blocked Trump's global 10% tariffs on nearly every country that he imposed on April 2, which he dubbed "Liberation Day." Higher tariffs set for a range of countries that day were also announced but delayed until July except for a 10% tariff placed on products from China.

The ruling also blocks 25% tariffs Trump had imposed on Canada and Mexico over border security and fentanyl trafficking, as well as another 20% tariff on most products from China.

Effectively, the court's order removes a 30% tariff on China by blocking both sets of tariffs. Trump had declared tariffs on China would go as high as 145% but those were never set in place.

In announcing Liberation Day, Trump said at the time that his tariff policies "are standing up for farmers and ranchers" who are "brutalized by nations."

The trade court said, "The worldwide and retaliatory tariff orders exceed any authority granted to the president by IEEPA to regulate importation by means of tariffs. The trafficking tariffs fail because they do not deal with the threats set forth in those orders. This conclusion entitles plaintiffs to judgment as a matter of law; as the court further finds no genuine dispute as to any material fact, summary judgment will enter against the United States."

Stephen Vaden, President Trump's nominee to be Agriculture deputy secretary, sits on the International Trade Court, but he was not one of the judges who considered this case. The three judges who issued the ruling were Gary Katzmann, Timothy Reif and Jane Restani.

The case was brought by five small businesses including V.O.S. Selections, a New York liquor firm, and other small businesses with support from Liberty Justice Center, a conservative legal organization. Twelve states led by Democratic governors also sued.

Farm groups and agribusinesses have expressed concerns that Trump's tariffs on goods imported to the United States would lead to retaliation against U.S. products.

Kush Desai, a White House spokesman, sharply rebuked the court for its ruling, saying in a statement that unfair trade relationships had "decimated American communities, left our workers behind and weakened our defense industrial base -- facts that the court did not dispute," The New York Times reported.

As of early Thursday, Trump had not issued any statement or posted on social media about the court's decision.

Trump "might still be able to temporarily launch import taxes of 15% for 150 days on nations with which the U.S. runs a substantial trade deficit," the Associated Press said. "The ruling notes that a president has this authority under Section 122 of the Trade Act of 1974."

Jerry Hagstrom can be reached at jhagstrom@nationaljournal.com

Follow him on social platform X @hagstromreport

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on social platform X @ChrisClaytonDTN

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