Donald Trump tariffs are back in dramatic appeal twist just 24 hours after loss

In a rapid legal twist, a federal appeals court on Thursday reinstated US President Donald Trump’s sweeping tariffs, just one day after a lower court ruled he had overstepped his authority.

The U.S. Court of Appeals for the Federal Circuit temporarily stayed the U.S. Court of International Trade’s decision, keeping in place Trump’s April 2 duties, dubbed “Liberation Day” tariffs, as the government pursues an appeal.

The trade court had struck down the tariffs, saying Trump misused the 1977 International Emergency Economic Powers Act (IEEPA) to justify a national emergency over long-standing trade deficits. 

“The reason that he chose IEEPA was he thought he could do this unilaterally without much oversight by Congress,” said Jeffrey Schwab of the Liberty Justice Center, which represented five small businesses challenging the tariffs.

The court's decision also halted additional levies targeting Canada, Mexico, and China, measures Trump linked to fentanyl imports.

The tariff war is unfolding in at least seven lawsuits, with two cases—one from five small businesses and another from a 12-state coalition—driving the latest ruling. A separate court decision shielded two Illinois toy makers from the duties.

While financial markets briefly rallied on the lower court’s ruling, the reinstatement of tariffs kept the effective U.S. rate near 15%, according to Oxford Research. Trump-era rates had averaged between 2% and 3%.

Trump blasted the trade court ruling on social media, calling it a threat to presidential authority. “If allowed to stand, this would completely destroy Presidential Power,” he wrote.

White House trade adviser Peter Navarro said the administration could pivot to other legal tools, including Section 301 or Section 232. “Even if we lose, we will do it another way,” he said.

Trade experts warn that a loss in court could drive Trump to seek more permanent tariff powers from Congress. “This may be a case of be careful what you ask for,” said trade lawyer Dan Ujczo.

As legal battles drag on, businesses and allies brace for prolonged uncertainty.