Federal Appeals Court Temporarily Reinstates Trump’s Tariffs, Elevating Ongoing Debate Over Presidential Trade Powers

May 29, 2025

Overview

On May 29, 2025, the U.S. Court of Appeals for the Federal Circuit issued a nonprecedential order temporarily reinstating President Donald Trump’s “Liberation Day” tariffs, which had been blocked by the U.S. Court of International Trade the previous day. The tariffs, introduced via Executive Order 14257 on April 2, 2025, imposed a 10% duty on most imports, with higher rates on countries like China, Canada, and Mexico. The Court of International Trade ruled that Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA), prompting the federal government to appeal. The appeals court’s stay keeps the tariffs in place pending further review, raising questions about the balance of power between Congress and the president in regulating international trade.

Facts

On April 2, 2025, President Trump issued Executive Order 14257, imposing a 10% tariff on nearly all imports, with 25% tariffs on Canada and Mexico, 20% on China, and up to 50% on other nations, citing trade deficits as a national emergency under the IEEPA.
On April 14, 2025, V.O.S. Selections, Inc., and four other small businesses filed a lawsuit in the U.S. Court of International Trade, challenging the tariffs’ legality.
On April 23, 2025, twelve states, led by Oregon, filed a similar suit, which was consolidated with the V.O.S. case.
On May 28, 2025, a three-judge panel (Judges Gary S. Katzmann, Timothy M. Reif, and Jane A. Restani) ruled that the IEEPA does not grant the president authority to impose tariffs, permanently enjoining their enforcement.
On May 29, 2025, the U.S. Court of Appeals for the Federal Circuit granted an administrative stay, temporarily reinstating the tariffs pending appeal, and consolidated the cases (V.O.S. Selections, Inc. v. Trump, No. 2025-1812, and Oregon v. Trump, No. 2025-1813).
The appeals court directed plaintiffs to respond by June 5, 2025, and the government by June 9, 2025.

Perspectives

Liberty Justice Center (representing V.O.S. Selections, Inc., and other businesses): Argues that the tariffs exceed presidential authority under the IEEPA and violate Congress’s constitutional power to regulate commerce. They claim the tariffs harm small businesses by increasing costs and disrupting supply chains, threatening economic viability.
Twelve Plaintiff States (led by Oregon): Contend that the tariffs impose financial burdens on state economies, raising costs for public services and consumers. They assert that trade deficits do not constitute an “unusual and extraordinary threat” under the IEEPA, rendering the tariffs unlawful.
Trump Administration (represented by the U.S. Department of Justice): Maintains that the tariffs address a national emergency caused by persistent trade deficits, which weaken the U.S. economy and defense industrial base. They argue that the IEEPA grants the president authority to regulate imports during such crises.
Consumer Advocacy Groups: Represented by advocacy groups like the Consumer Federation of America, they express concern that the tariffs increase prices for goods, disproportionately affecting low-income households and exacerbating inflation.
U.S. Manufacturers (e.g., National Association of Manufacturers): Support the tariffs, arguing they protect domestic industries from unfair foreign competition, potentially creating jobs and strengthening the industrial base.
Constitutional Scholars (amici curiae, including Steven Calabresi and Michael McConnell): Assert that the tariffs violate the separation of powers, as Congress holds exclusive authority over tariffs. They warn that upholding such executive actions could set a precedent for unchecked presidential power.

Considerations

The reinstatement of tariffs may stabilize trade negotiations short-term but risks escalating trade wars long-term if foreign nations retaliate.
Small businesses face immediate cost increases, potentially leading to price hikes or layoffs, while larger manufacturers may benefit from reduced foreign competition.
The legal battle highlights tensions between congressional and executive powers, with potential implications for future trade policy frameworks.
Consumer prices may rise, exacerbating inflation concerns, particularly for imported goods like electronics and clothing.
The case may reach the Supreme Court, potentially clarifying the scope of presidential authority under the IEEPA and similar statutes.
Global markets remain volatile, as investors react to uncertainty over U.S. trade policy and its economic impacts.
The outcome could influence public trust in government, as citizens weigh economic impacts against constitutional principles.