Tariff On, Tariff Off, Tariff On? What's Going On In The Courts?

"We're all in" - Nvidia CEO Jensen Huang praises "utterly visionary" Trump tariffs The CEO of Nvidia has praised the tariffs recently imposed by US President Donald Trump on nations around the world, calling them "utterly visionary". ......... Speaking to Bloomberg following Nvidia's recent quarterly results, Jensen Huang was effusive with his backing for the tariffs, and for Trump personally. ........ “Obviously, I don’t know all of his ideas, but let me tell you about two that are incredible,” Huang said. ....... "The first one is utterly visionary. The idea of tariffs being a pillar of a bold vision to re-industrialize to onshore manufacturing and motivate the world to invest in the United States is just an incredible vision. I think this is going to be a transformative idea for the next century for us." ......... "The second major idea," Huang went on, "is to rescind the AI diffusion role, recognizing that this isn't about limiting American technology, but this is about accelerating American stacks around the world to make sure that, before it's too late that the world builds on American stacks during this extraordinary time, the AI era." ........ "These two initiatives are completely visionary, and it's going to be transformative for America." ........ Huang's comments come a day after HP CEO Enrique Lores revealed his company would be raising prices in order to deal with rising costs incurred by tariffs. ......... Lores noted the company would be forced it to take what he called "price actions", effectively increases across PC and printing hardware, as well as no longer using the US as a distribution hub for products sold in Canada or to Latin America. ............ Huang called the current technology landscape, "a once in a lifetime opportunity - in the last 60 years, this is the biggest reinvention that you and I have seen."

The Perils of Bypassing the Democratic Process: A Lesson in Governance
The Fall of "Liberation Day" Tariffs: Implications for Trade, Politics, and Global Affairs
A Radical Blueprint to Transform New York City into the World’s Greatest Metropolis
Economies Poised for High Growth
India’s Chances of Achieving Double-Digit Growth Rates
China’s Governance Model: A Case for Meritocratic Efficiency
St. Louis Renewal
Components Of A Sane Southern Border
"US court blocks Trump's 'Liberation Day' tariffs"

 

The situation with President Donald Trump’s tariffs involves a complex interplay of judicial rulings, executive authority, and congressional roles, reflecting ongoing tensions over the separation of powers in U.S. trade policy. Here’s a breakdown of what’s happening, the judicial process ahead, and the role of Congress, based on recent developments and the broader legal context.

What’s Going On?

On May 28, 2025, the U.S. Court of International Trade (USCIT) issued a unanimous ruling by a three-judge panel, appointed by Presidents Reagan, Obama, and Trump, that struck down most of Trump’s tariffs. These tariffs included a 10% baseline tariff on imports from nearly all U.S. trading partners, higher “reciprocal” tariffs on dozens of countries (ranging from 11% to 84%), and specific tariffs on Canada, Mexico (25%), and China (20%) tied to issues like fentanyl trafficking. The court found that Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA) of 1977, which he invoked to justify the tariffs by declaring trade deficits and drug trafficking as national emergencies. The USCIT ruled that IEEPA does not grant the president “unbounded authority” to impose such sweeping tariffs, as the Constitution assigns Congress the primary power to regulate commerce and impose tariffs (Article I, Section 8). The court ordered the administration to halt tariff collection within 10 days, arguing that the tariffs were not directly tied to addressing the cited emergencies (e.g., trade deficits or drug trafficking) but were instead designed to create economic leverage, which exceeds IEEPA’s scope.

On May 29, 2025, the U.S. Court of Appeals for the Federal Circuit granted an administrative stay, temporarily reinstating the tariffs while it considers the Trump administration’s appeal. This stay is procedural, allowing time for the court to review filings (plaintiffs’ response due by June 5, administration’s reply by June 9). The stay does not indicate the court’s view on the merits of the case but preserves the status quo during the appeal process. The administration argued that halting the tariffs would cause “irreparable harm” to national security and foreign policy, particularly as Trump uses tariffs as leverage in trade negotiations.

Additionally, a separate ruling on May 29 by U.S. District Judge Rudolph Contreras in the District of Columbia blocked Trump’s tariffs for two Illinois toy importers, finding similar issues with IEEPA’s application, though this ruling was narrower and paused for 14 days pending appeal. This illustrates the fragmented nature of the legal challenges, with at least seven lawsuits filed by states, businesses, and advocacy groups.

The rapid back-and-forth reflects the contentious nature of Trump’s tariff strategy, which relies on executive action to bypass Congress, and the judiciary’s role in checking whether such actions align with statutory and constitutional limits. The USCIT’s ruling was a significant setback for Trump’s trade agenda, but the Federal Circuit’s stay buys time for the administration to pursue its appeal, potentially escalating the case to the Supreme Court.

Judicial Process and Next Steps

The judicial process for resolving the legality of Trump’s tariffs involves several stages, with the potential for a definitive ruling to take months or longer. Here’s the likely path forward:

1. U.S. Court of International Trade (USCIT):
   • The USCIT’s May 28 ruling was a decision on the merits in two consolidated cases—one brought by 12 Democratic-led states (e.g., New York, Oregon) and another by five small businesses (e.g., V.O.S. Selections). The court issued a permanent injunction, declaring the tariffs illegal and ordering their cessation. This ruling applies broadly, not just to the plaintiffs, because the tariffs were deemed “unlawful as to all.”
   • The administration immediately appealed to the U.S. Court of Appeals for the Federal Circuit and requested a stay, which was granted on May 29. The USCIT could still be involved if further procedural motions arise, but the focus has shifted to the appellate level.
2. U.S. Court of Appeals for the Federal Circuit:
   • The Federal Circuit, which has jurisdiction over USCIT appeals, issued an administrative stay to allow time to consider a longer stay pending appeal. The court has set a briefing schedule (plaintiffs respond by June 5, administration by June 9), after which it will decide whether to maintain the stay or let the USCIT’s injunction take effect.
   • The Federal Circuit will then review the merits of the USCIT’s ruling, focusing on whether Trump’s use of IEEPA was lawful and whether the tariffs align with constitutional and statutory limits. This process could take several months, depending on the court’s docket and the complexity of the case. Oral arguments and a written decision would follow.
   • If the Federal Circuit upholds the USCIT’s ruling, the tariffs would be permanently blocked unless the administration appeals further. If it overturns the ruling, the tariffs could proceed, though plaintiffs could appeal to the Supreme Court.
3. U.S. Supreme Court:
   • If either party loses at the Federal Circuit, they are likely to appeal to the Supreme Court, which has discretion to take the case. The administration has already signaled it may seek emergency relief from the Supreme Court if the Federal Circuit does not maintain the stay.
   • The Supreme Court could issue an emergency stay or injunction to preserve or halt the tariffs while it considers whether to hear the case. If it takes the case, a ruling could address broader questions about presidential authority under IEEPA, the nondelegation doctrine (whether Congress improperly delegated tariff power), and the major questions doctrine (whether major economic policies require clear congressional authorization).
   • A Supreme Court decision could take a year or more, though expedited review is possible given the tariffs’ economic and diplomatic impact. A ruling would likely be final, unless Congress passes new legislation to alter the legal framework.
4. Parallel Litigation:
   • Other lawsuits, like the D.C. District Court case, are proceeding in parallel. These may be consolidated or transferred to the USCIT, which has exclusive jurisdiction over tariff disputes. The outcomes of these cases could influence the main appeal but are narrower in scope (e.g., applying only to specific plaintiffs).
   • If the Supreme Court limits nationwide injunctions (a separate issue the administration is pushing), it could complicate relief for plaintiffs, requiring individual importers to file separate lawsuits.

The judicial process hinges on whether IEEPA grants the president authority to impose tariffs of this scope and whether such actions encroach on Congress’s constitutional power. The USCIT relied on precedents like United States v. Yoshida (1973), which upheld limited tariffs under IEEPA’s predecessor but distinguished Nixon’s narrower actions from Trump’s broader approach. The courts will also consider whether trade deficits or drug trafficking constitute valid “emergencies” under IEEPA and whether the tariffs are a reasonable response.

Why Is Congress Missing in Action?

Congress’s apparent inaction on Trump’s tariffs stems from a combination of constitutional, political, and practical factors:

1. Constitutional Role and Delegation:
   • The Constitution explicitly grants Congress the power “to lay and collect Taxes, Duties, Imposts and Excises” and to regulate commerce with foreign nations (Article I, Section 8). However, Congress has historically delegated significant trade authority to the executive branch through statutes like IEEPA, the Trade Act of 1974, and the Trade Expansion Act of 1962. These laws allow the president to impose tariffs under specific conditions (e.g., national security, trade imbalances), often with minimal congressional oversight.
   • The USCIT’s ruling emphasized that IEEPA does not grant “unbounded” tariff authority, reinforcing that Congress holds primary power. However, Congress’s delegation of authority in IEEPA and other laws has created ambiguity, enabling presidents to act unilaterally unless challenged in court.
2. Political Dynamics:
   • Congress is deeply polarized, and Trump’s tariffs are a divisive issue. Many Republicans support Trump’s “America First” trade agenda, viewing tariffs as a tool to boost U.S. manufacturing and counter foreign trade practices. Democrats and some Republicans (e.g., Sen. Rand Paul) oppose the tariffs, citing their economic harm to consumers and businesses, but lack the cohesion or votes to pass legislation overriding them.
   • Passing new trade legislation or revoking Trump’s tariffs would require bipartisan agreement and potentially a veto-proof majority (two-thirds in both chambers), as Trump could veto any bill limiting his authority. With Republicans controlling the House and Senate in 2025, such a move is unlikely.
   • Trump’s tariffs were imposed via executive action, bypassing Congress entirely. This reduces the immediate need for congressional action, as the judiciary is currently the primary check. Congress could theoretically pass a law to reinstate or block the tariffs, but political gridlock and the complexity of trade policy make this improbable in the short term.
3. Practical Considerations:
   • Congress moves slowly due to its deliberative process, committee structures, and competing priorities (e.g., budget negotiations, immigration). The tariffs’ rapid implementation and judicial challenges have outpaced Congress’s ability to respond legislatively.
   • Some lawmakers may prefer to let the courts resolve the issue, avoiding the political risk of taking a stance. If the courts ultimately strike down the tariffs, Congress avoids a contentious fight. If the tariffs are upheld, Congress can revisit the issue later with clearer legal guidance.
4. Should Congress Be Active?:
   • From a constitutional perspective, Congress should be active, as the USCIT’s ruling underscores that tariff power belongs to Congress. The nondelegation doctrine, cited by the court, suggests that Congress cannot delegate sweeping legislative authority to the executive without clear limits. A decision against Trump could prompt Congress to clarify IEEPA’s scope or pass new trade laws to reassert control.
   • However, Congress’s inaction reflects a broader trend of ceding trade authority to the executive, a practice dating back decades. Reversing this would require significant political will, which is currently lacking. Critics argue that Congress’s passivity allows presidents to exploit vague statutes like IEEPA, undermining the separation of powers.

Broader Context and Implications

The tariff dispute highlights a tension between executive power and congressional authority, with the judiciary acting as a referee. Trump’s use of IEEPA to impose tariffs is unprecedented, as the law was historically used for sanctions, not broad tariffs. The administration’s appeal and rhetoric (e.g., calling the USCIT ruling a “judicial coup”) suggest a strategy to push the limits of executive authority, potentially setting up a landmark Supreme Court case on presidential power.

Economically, the tariffs have caused global market turmoil, raised consumer prices, and disrupted trade talks, with businesses and states arguing they are “economically devastating.” The Federal Circuit’s stay provides temporary relief for the administration, but a final ruling against the tariffs could force Trump to use other statutes (e.g., Section 301 of the Trade Act of 1974) or negotiate with Congress for new authority, both of which involve more procedural hurdles.

Congress’s absence from the fray reflects both its delegated authority and political realities. If the Supreme Court ultimately rules, it could redefine the balance of power in trade policy, either curbing executive overreach or affirming broad presidential authority, depending on the outcome. For now, the judicial process will determine the tariffs’ fate, with Congress likely to remain on the sidelines unless forced to act by a definitive court ruling or public pressure.

Summary

• What’s Happening: The USCIT struck down Trump’s tariffs on May 28, 2025, for exceeding IEEPA authority, but the Federal Circuit reinstated them temporarily on May 29 via an administrative stay, pending appeal. This reflects ongoing legal challenges to Trump’s executive actions.
• Judicial Process: The Federal Circuit will review the USCIT’s ruling, with briefs due in early June 2025. A decision could take months, followed by a likely Supreme Court appeal, which may not conclude until 2026. Parallel lawsuits add complexity but may consolidate under USCIT jurisdiction.
• Congress’s Role: Congress has the constitutional power over tariffs but has delegated significant authority to the executive. Political polarization, procedural delays, and reliance on courts explain its inaction. Congress could act to clarify or limit presidential trade powers but is unlikely to do so without a clear judicial or public mandate.