The Trump administration scored a temporary legal reprieve on Thursday after a federal appeals court agreed to pause a lower court ruling that had struck down much of President Donald Trump’s sweeping tariff regime.
The move preserves for now—the administration’s authority to impose tariffs under emergency powers, just as legal and economic battles over the trade measures intensify.
The U.S. Court of Appeals for the Federal Circuit issued a brief order granting the administration’s request to stay a May 28 judgment by the U.S. Court of International Trade. That lower court had ruled that key elements of Trump’s trade policy, including the so-called “Worldwide and Retaliatory Tariff Orders,” exceeded the authority granted to the president under the International Emergency Economic Powers Act (IEEPA). The orders targeted imports from multiple U.S. trading partners and were part of Trump’s broader effort to reset America’s global trade relationships.
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“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the trade court said in a stinging rebuke on Wednesday, siding with five small business owners who challenged the administration’s authority.
The Trump administration responded swiftly, warning the appeals court that it would seek “emergency relief” from the U.S. Supreme Court as early as Friday if the lower court’s ruling was not put on hold. The Federal Circuit’s temporary stay prevents that escalation for now, allowing time for the court to fully consider the case.
“The trade court’s judgment is temporarily stayed until further notice while this court considers the motions papers,” the appeals court wrote in its one-paragraph order.
Legal Challenge to Executive Power
The plaintiffs in the case—a group of small, owner-operated import businesses—had argued that Trump’s use of IEEPA to justify wide-ranging tariffs lacked legal basis. Their lead attorney, Jeffrey Schwab, who serves as Senior Counsel and Interim Director of Litigation at the Liberty Justice Center, told Business Insider the court’s initial ruling was a much-needed check on executive overreach.
“I think the court understood that the administration’s argument—that it had essentially unilateral authority to impose whatever tariffs it wanted on any country, at any rate, at any time—under IEEPA went too far,” Schwab said. “So we’re really happy the court ruled the way it did, and I think we will make the same arguments before the Federal Circuit Court of Appeals.”
Schwab added that the lower court’s ruling acknowledged the real limits on presidential power, even under emergency laws originally designed for foreign policy crises, not economic re-engineering.
Economic and Political Stakes
The legal battle is unfolding against the backdrop of growing unease over the tariffs’ impact on the U.S. economy. Earlier, the Commerce Department reported that the economy shrank by 0.2% in the first quarter of 2025, the first contraction in three years. The drop was largely driven by a surge in imports, as U.S. companies scrambled to stock up before the tariffs took full effect, and by declines in consumer and federal government spending.
The temporary stay granted by the appeals court now leaves the business community and economic forecasters with uncertainty. While the ruling allows the administration to maintain its tariffs in the near term, it also signals that a final judgment on their legality may still be months away.
If the tariffs are eventually struck down again, it could offer much-needed relief to U.S. importers, manufacturers, and consumers burdened by rising prices. Conversely, if the court upholds Trump’s use of emergency powers under IEEPA, it could cement a dramatic expansion of presidential authority over trade policy.
The appeals court did not provide a timeline for its decision on the administration’s motion. If it eventually sides with the lower court, the case could quickly advance to the U.S. Supreme Court—where the broader question of how much power the president has to reshape the U.S. economy through emergency declarations could be tested in full.
Until then, the tariffs remain in place, prolonging a period of legal, political, and economic uncertainty that continues to shape both America’s trade posture and its broader economic trajectory.