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Trump wins tariff reprieve as trade agenda faces court rollback

Josh Wingrove and Jennifer A. Dlouhy, Bloomberg News on

Published in News & Features

WASHINGTON — A federal appeals court offered President Donald Trump a temporary reprieve from a ruling threatening to throw out the bulk of his sweeping tariff agenda, offering at least some hope to a White House now facing substantial new restrictions on its effort to rewrite the global trading order.

The administration celebrated the order from the U.S. Court of Appeals for the Federal Circuit as validating its vow to aggressively challenge a ruling issued Wednesday night by the Court of International Trade blocking sweeping parts of Trump’s tariffs over his use of the International Emergency Economic Powers Act, or IEEPA.

“I can assure you, American people, that the Trump tariff agenda is alive, well, healthy, and will be implemented to protect you, to save your jobs and your factories,” trade adviser Peter Navarro told reporters Thursday.

Even as Navarro celebrated the temporary stay, the possibility that the appeals court could ultimately back the original ruling and block Trump’s tariff policy hung heavy over the White House. Separately, a second federal judge declared a number of Trump’s levies enacted using emergency powers unlawful, but limited his decision to the family-owned business that sued and delayed the order from taking effect for 14 days to allow the Justice Department time to appeal.

White House officials said they planned to continue defending the legality of their efforts on trade to the U.S. Supreme Court, and said that if they were stymied, Trump would simply pursue the same levies through other authorities.

“America cannot function if President Trump — or any other president, for that matter — has their sensitive diplomatic or trade negotiations railroaded by activist judges,” White House press secretary Karoline Leavitt said Thursday. “Ultimately, the Supreme Court must put an end to this for the sake of our Constitution and our country.”

But for a president eager to use trade policy to reshape global commerce, other policy options are far from a quick fix. Some of the other powers are laborious to use and would take months or more to execute, while others are capped in scope and duration.

For all of the confidence on Trump’s team, Wednesday’s initial court ruling marked one of the biggest setbacks of the president’s second term. Trump campaigned on using tariffs to combat what he calls other nation’s unfair treatment of the United States, and the emergency law gave him the fastest avenue to deliver on his pledge.

The ruling would reduce the effective U.S. tariff rate to below 6% from a high of almost 27% last month, according to Bloomberg Economics calculations, an astronomical level that risked stagflation for the U.S.

The legal fight also threatens to inject even more uncertainty into a world economy already rattled by Trump’s ever-changing posture on import taxes. It may sap Trump’s leverage as his team negotiates with numerous trading partners seeking tariff relief.

The trade court decision Wednesday blocked tariffs on Mexico, Canada, China as well as a flat import tax on almost every U.S. trading partner. Trump invoked the IEEPA on the grounds that fentanyl and trade deficits are each emergencies necessitating the broad use of executive power. The court ruled he went too far.

The White House on Thursday said it is looking at other options, but advisers acknowledged the potential for them being more time-consuming.

“There are different approaches that would take a couple of months to put these in place and using procedures that have been approved in the past or approved in the last administration, but we’re not planning to pursue those right now,” National Economic Council Director Kevin Hassett said on Fox Business.

Yet amid mounting concern about the vulnerability of Trump’s IEEPA-based tariffs, the administration has already embraced separate legal authorities to pursue other levies.

The Trump administration has invoked Section 232 of the Trade Expansion Act to set the stage for sweeping levies that could touch everything from smartphones to jet engines.

Since Trump took office in January, the Commerce Department has already enacted Section 232 tariffs on on steel, aluminum, vehicles and auto parts, and launched investigations on trucks, copper, lumber, semiconductors, critical minerals, pharmaceuticals and aircraft.

 

Those tariffs are seen as less legally vulnerable than Trump’s ad-hoc nation-by-nation approach, but take months to enact. The probes typically produce findings within 270 days, but administration officials have stressed they can go faster.

Navarro said that U.S. Trade Representative Jamieson Greer would address other avenues soon. “Any trade lawyer knows it’s just a number of different options we can take,” Navarro said.

A shift in strategy could be time-consuming, dragging out both the uncertainty of Trump’s tariff policy and the timeline for him to see some domestic political impact.

Ticking Clock

“The idea that Trump is going to turn to Plan B and do tariffs by other means has problems,” said James Lucier, managing director at the research firm Capital Alpha Partners. “Yes, he will do it. But he is running out of time to do tariffs and get results before the midterm elections.”

Even so, taking the time to build an ironclad case for tariffs using other legal authorities is key to ensuring they survive court scrutiny and, perhaps, future elections, analysts said.

“If Trump jumps through the hoops and does all the paper for Section 232 tariffs, then he may have tariffs that are legally sustainable,” Lucier said. “If he wants to complete a sloppy pro forma process in six weeks, the same deep-pocketed anti-tariff folks who came after him on IEEPA will come after him on 232.”

The trade court’s ruling also nodded to Section 122 powers — which Trump could use to impose tariffs on nations of as much as 15%, but only for about five months — as another avenue. Navarro conceded the administration had avoided doing so originally because of restrictions on how long those tariffs could remain in place.

“Well, Section 122, only gives you 150 days. So there’s your answer right there,” he told Bloomberg Television.

Trump has also used authorities under Section 301 of the U.S. Trade Act of 1974 to enact previous tariffs on China. Whether he will now try to enact more duties through that authority, including on China, is unclear.

Section 301 empowers presidents to take a range of actions — not just tariffs — to address unfair policies seen as restricting U.S. commerce. Affected industries have previously sought Section 301 investigations on shipbuilding, solar and other imports, but a president can initiate those probes on his or her own.

Investigations on auto and steel tariffs dating back to his first four years in office allowed Trump to move more quickly on those levies than on other sectors where he was starting from scratch.

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(With assistance from Greg Stohr, Akayla Gardner, Rana Sajedi, Maeva Cousin, Tom Orlik, Annmarie Hordern, Jonathan Ferro and Erik Larson.)


©2025 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

 

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