WASHINGTON – A federal appeals court ruled Tuesday that sweeping tariffs imposed by U.S. President Donald Trump on Canada and other nations will remain in effect while the administration’s authority to enact them is litigated, granting a temporary but significant victory to the White House.
The United States Court of Appeals for the Federal Circuit determined that “a stay is warranted under the circumstances,” pausing a lower court’s decision that had declared the tariffs unlawful. The move ensures that, for now, businesses will continue to pay the controversial levies that have roiled supply chains and sparked widespread legal opposition.
“I [Ilya Somin] remain guardedly optimistic that the appellate court will ultimately see that the president’s claim of virtually unlimited power to impose tariffs is blatantly illegal – which is what every court to have considered the issue so far has concluded”
The Trump administration praised the decision, defending the president’s use of emergency powers to reshape American trade policy.
“The Trump administration is legally using the powers granted to the executive branch by the Constitution and Congress to address our country’s national emergencies of persistent goods trade deficits and drug trafficking,” White House spokesman Kush Desai said in a statement Tuesday. “The U.S. Circuit Court of Appeals’ stay order is a welcome development, and we look forward to ultimately prevailing in court.”
The legal battle stems from a ruling last month by the U.S. Court of International Trade. A three-judge panel at the New York-based court found that President Trump had overstepped his authority by using the International Economic Emergency Powers Act of 1977 (IEEPA) to impose tariffs. The court stated unequivocally that “any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional” and ordered that “the challenged tariff orders will be vacated.”
That ruling was immediately frozen after the administration was granted an emergency stay. Tuesday’s decision by the appeals court upholds that stay but also acknowledged the gravity of the constitutional questions at stake. The court noted that “these cases present issues of exceptional importance warranting expedited en banc consideration,” and has set a schedule that anticipates arguments by July 31.
Opponents of the tariffs expressed disappointment but saw a silver lining in the expedited hearing.
“We have a strong case, and I remain guardedly optimistic that the appellate court will ultimately see that the president’s claim of virtually unlimited power to impose tariffs is blatantly illegal – which is what every court to have considered the issue so far has concluded,” said Ilya Somin, a law professor at George Mason University who is representing five American small businesses in the case.
The legal challenges target two major tariff actions. The first was enacted in March, when Trump declared a national emergency over fentanyl trafficking and imposed economy-wide duties on Canada, a move he later partially suspended for goods compliant with the CUSMA trade pact. This was despite U.S. government data showing that only a tiny fraction of fentanyl is seized at the northern border.
The second action came in April, when Trump declared the nation’s trade deficit a national emergency, imposing a 10 per cent universal tariff on most countries.
The cases have drawn broad opposition, uniting a dozen states and a bipartisan group of 33 U.S. senators who argue the tariffs usurp congressional authority and inflict severe damage on American businesses.
“Small businesses do not have cash-on-hand or capital reserves to pay the increased tariffs, nor can they quickly adapt to them by modifying supply chains,” the senators wrote in a legal brief. “If they cannot pass on the tariff costs to consumers – which would create additional harms for… constituents – many face letting employees go or filing for bankruptcy. Even a few weeks of additional tariffs means small businesses will suffer irreparable harm.”
The White House has remained defiant, with Press Secretary Karoline Leavitt previously calling the lower court’s decision “judicial overreach” and urging the Supreme Court to intervene.
At least seven lawsuits are currently challenging the tariffs, which are separate from duties on steel, aluminum, and automobiles enacted under the Trade Expansion Act of 1962.
