On Tuesday, the U.S. Court of Appeals for the Federal Circuit granted the Trump administration’s request to stay the earlier decision by the U.S. Court of International Trade.
That decision had concluded that Trump overstepped his legal authority by imposing broad tariffs under the International Emergency Economic Powers Act (IEEPA). The appeals court also took the unusual step of scheduling a full-bench hearing for July 31, signaling that the case raises matters of exceptional importance.
The dispute centers on Trump’s April 2 declaration of a national emergency under IEEPA, which allowed him to impose a 10 percent baseline tariff on most imports and targeted levies on countries such as Canada, China, and Mexico.
Trump cited persistent trade deficits and the flow of synthetic opioids and illegal immigrants across the southern border as justification. Although some tariffs were paused for negotiation purposes, the core tariffs remained in place and quickly drew legal challenges from a coalition of states and small businesses.
On May 28, the U.S. Court of International Trade ruled in favor of the challengers, concluding that the president’s actions were outside the scope of the law. The plaintiffs argued that a long-term trade imbalance does not constitute the kind of emergency that IEEPA was designed to address.
But the appeals court’s decision to stay that ruling allows the tariffs to continue while it conducts a more thorough review. In a short opinion, the court said both sides had raised substantial arguments and that maintaining the current tariffs during litigation was appropriate.
The Liberty Justice Center, which represents five small businesses involved in the suit, said it was disappointed by the temporary continuation of the tariffs but welcomed the expedited schedule. “Every court to rule on the merits so far has found these tariffs unlawful,” said Jeffrey Schwab, the group’s senior counsel. “We have faith that this court will likewise see what is plain as day: that IEEPA does not allow the president to impose whatever tax he wants whenever he wants.”
The full panel of active judges will hear oral arguments at 10:00 a.m. on July 31 in Washington, D.C., in a rarely convened en banc session, typically reserved for cases with broad national implications.
White House spokesman Kush Desai defended the administration’s position, stating the executive branch is operating fully within its legal authority. “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,” Desai said. “The US Circuit Court of Appeals’ stay order is a welcome development, and we look forward to ultimately prevailing in court.”
Commerce Secretary Howard Lutnick echoed that sentiment in a Fox News interview, pointing to the $1.2 trillion trade deficit as justification. “Rest assured, tariffs are not going away,” Lutnick said. “Congress has given this authority to the president, and he’s going to use it.”
Trump, writing on Truth Social, warned that striking down the tariffs would hand foreign governments leverage over the U.S. economy. “This would mean the Economic ruination of the United States of America,” he said.
The case is now shaping up to be a major test of presidential trade powers and could influence how future administrations respond to global trade disputes.