UPDATED 3:14 P.M.
(Reuters) -A federal appeals court on Thursday reinstated the most sweeping of President Donald Trump’s tariffs, a day after a trade court had ruled Trump had exceeded his authority in imposing the duties and had ordered an immediate block on them.
An order from the United States Court of Appeals for the Federal Circuit in Washington provided no opinion or reasoning but directed the plaintiffs in the case to respond by June 5 and the administration by June 9.
Wednesday’s surprise ruling by the U.S. Court of International Trade had threatened to kill or at least delay the imposition of Trump’s “Liberation Day” tariffs on most U.S. trading partners, as well as import levies on goods from Canada, Mexico and China related to his accusation that the three countries were facilitating the flow of fentanyl into the U.S.
Senior Trump administration officials had said they were undeterred by the trade court’s ruling, saying they expected either to prevail on appeal or employ other presidential powers to ensure they go into effect.
The White House also said the ruling had not interfered with any negotiations with top trading partners that are scheduled in the days ahead. A fourth round of talks with Japan is set for Friday in Washington, and a trade negotiating team from India is headed to the U.S. next week for talks.
Financial markets, which have whipsawed wildly in response to every twist and turn in Trump’s chaotic trade war, reacted with cautious optimism to the trade court ruling, though gains in stocks were largely limited by expectations that the court’s ruling faced a potentially lengthy appeals process.
Indeed, analysts said broad uncertainty remained regarding the future of Trump’s tariffs, which have cost companies more than $34 billion in lost sales and higher costs, according to a Reuters analysis.
Emblematic of that uncertainty, a separate federal court earlier on Thursday had also found Trump overstepped his authority in using the International Emergency Economic Powers Act for what he called “reciprocal” tariffs of at least 10% on goods from most U.S. trading partners and for the separate 25% levies on goods from Canada, Mexico and China related to fentanyl.
That ruling was much narrower, however, and the relief order stopping the tariffs only applied to the toy company that brought the case.
(Reporting by Summer Zhen, Samuel Indyk and Sarah Marsh; Additional reporting by Luc Cohen; Doina Chiacu, Nicholas P. Brown and David Ljunggren; Writing by Joseph Ax and Barbara Lewis; Editing by Catherine Evans, Giles Elgood and Nick Zieminski)
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(Reuters) -Senior Trump administration officials on Thursday downplayed the impact of a U.S. trade court ruling that blocked the most sweeping of President Donald Trump’s tariffs, expressing confidence it would be overturned on appeal and insisting there are other legal avenues to employ in the interim.
Financial markets, which have whipsawed wildly in response to every twist and turn in Trump’s chaotic trade war, reacted with cautious optimism on Thursday, a day after the U.S. Court of International Trade ruled that Trump overstepped his authority in imposing punitive tariffs on virtually every country in the world.
The Trump administration immediately asked an appeals court to stay the ruling and allow the tariff regime to remain in place. Trump has put tariffs at the center of his effort to extract concessions from U.S. trading partners, including traditional allies such as the European Union.
White House economic adviser Kevin Hassett expressed confidence that the ruling would ultimately be reversed in an interview with Fox Business on Thursday. He also said it would not get in the way of signing new trade deals.
“If there are little hiccups here or there because of decisions that activist judges make, then it shouldn’t just concern you at all, and it’s certainly not going to affect the negotiations,” Hassett said.
White House trade adviser Peter Navarro, a staunch proponent of higher tariffs, told Bloomberg TV that the Trump administration could rely on other laws to implement import taxes if the court’s decision remains in place.
Trump had invoked the International Emergency Economic Powers Act (IEEPA), a law intended to address threats during national emergencies, to impose tariffs on almost every U.S. trading partner, raising fears of a global recession. The president temporarily suspended many of the tariffs until early July after markets swooned in response.
The court found that the emergency powers law does not grant Trump the unilateral power to order such sweeping tariffs. Some sector-specific tariffs, such as those Trump has imposed on steel, aluminum and automobiles, were imposed under separate authorities on national security grounds and were unaffected by the ruling.
Canadian Prime Minister Jay Carney welcomed the decision, saying it was “consistent with Canada’s longstanding position” that Trump’s tariffs were unlawful.
Other U.S. trading partners offered careful responses. The British government said the ruling was a domestic matter for the U.S. administration and noted it was “only the first stage of legal proceedings.”
Both Germany and the European Commission said they could not comment on the decision.
MODEST MARKET GAINS
Several analysts said it was preliminary to conclude this closes the door entirely on Trump’s sweeping tariffs, with legal paths other than IEEPA likely at his disposal.
“We suspect the administration will lean on other legal authorities to maintain tariff levels around current levels,” Bernard Yaros, lead U.S. economist at Oxford Economics, wrote in a note to clients on Thursday.
After prompting an initial surge in stocks in Asia, the ruling stimulated more muted reactions in Europe, where indexes were largely flat, and in the U.S., where gains were modest. The S&P 500 was up about 0.5%, having given back about half of its initial rise at the opening bell.
An early rally in the dollar also fizzled and the greenback was about 0.4% lower against a basket of major trading partner currencies. Bond yields also slipped.
Following a market revolt after his major tariff announcement on April 2, Trump paused most import duties for 90 days and said he would hammer out bilateral deals with trade partners.
But apart from a pact with Britain this month, agreements remain elusive, and the court’s suspension of the tariffs may dissuade countries like Japan from rushing into deals, analysts said.
“Assuming that an appeal does not succeed in the next few days, the main win is time to prepare, and also a cap on the breadth of tariffs – which can’t exceed 15% for the time being,” George Lagarias, chief economist at Forvis Mazars international advisers, said.
Trump’s trade war has shaken makers of everything from luxury handbags and sneakers to household appliances and cars as the price of raw materials has risen, supply chains have been disrupted and company strategies redrafted.
Drinks company Diageo, automakers General Motors and Ford are among those who have abandoned forecasts for the year ahead.
Non-U.S. companies including Honda, Campari and pharmaceutical companies Roche and Novartis have said they are considering moving operations or expanding their U.S. presence to mitigate the impact of tariffs.
(Reporting by Summer Zhen, Samuel Indyk and Sarah Marsh; Additional reporting by Doina Chiacu, David Ljunggren; Writing by Joseph Ax and Barbara Lewis; Editing by Catherine Evans, Giles Elgood and Nick Zieminski)




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