Tariff Situation Remains Fluid Amid Temporary Stay on Tariffs
It’s hard to keep up with the ongoing tariff situation.
The administration’s aggressive tariff strategy encountered a major legal setback this week. On Thursday, we reported that a federal court ruled the administration lacked the authority to impose sweeping tariffs under emergency economic powers. The ruling directly challenges Trump’s reliance on the International Emergency Economic Powers Act (IEEPA) as the legal foundation for levying broad duties on U.S. trading partners—duties he has long defended as necessary to address persistent trade imbalances.
Although the court invalidated his use of IEEPA, a federal appeals court granted a temporary stay on Thursday. This allows the current tariffs to remain in place while the administration appeals the ruling. Meanwhile, U.S. officials are actively exploring alternative legal avenues to preserve or reinstate the tariffs should the appeal ultimately fail.
Futures surged on Wednesday afternoon following earlier developments, but by Thursday, market reaction had cooled, with little movement in overall trading or lighting stocks.
The administration continues to defend these tariffs as an important tool to rebalance trade in America’s favor, particularly in dealings with China, Canada, and Mexico. The administration maintains that the U.S. trade deficit constitutes an ongoing national emergency, which, in his view, justifies extraordinary executive action.
For now, the stay allows the president’s trade strategy to continue, keeping duties in place on key imports. The appeals court’s decision effectively buys the administration time to search for new legal arguments. As reported in today’s Wall Street Journal, U.S. officials are actively developing a Plan B if the appeal ultimately fails.