Appeals Court Pauses Block on Trump Tariffs

Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--On Wednesday, the U.S. Federal Court of International Trade (USCIT) ruled that most of the retaliatory tariffs assessed by President Donald Trump were based on an unconstitutional usurpation of power and therefore were invalid.

But on Thursday, the United States Court of Appeals for the Federal Circuit, at the behest of the Department of Justice, issued an administrative stay of the decision in order to consider the administration's appeal.

The unanimous three-judge ruling by the USCIT came in a case initiated by five businesses and 12 states. For related information, subscribers to IIR Energy's Breaking Energy News (BEN) can click here.

The U.S. Energy Information Administration (EIA) has reported that tariff concerns have created headwinds for global trade, weighing on oil consumption growth. For more information, see April 16, 2025, article - Oil Prices Still Under Pressure from Trade Issues.

A recent U.S. Federal Reserve Bank of Dallas survey showed that "drillers need oil priced at $64 per barrel to make a profit."

Further, the Dallas Fed in May saw tariffs pressuring oil producers' break-even oil price higher because the cost of supplies coming from overseas could rise. Trump has placed a 25% tariff on imported aluminum and steel, key metals used in the energy industry. For more information, see May 5, 2025, article - Dallas Fed Sees Tariff Pressures on Break-Evens.

Renewable energy, already reeling from the administration's pivot away from funding and tax credits for their projects, had been further dampened by the expected rise in supply costs. For more information, see May 2, 2025, article - First Solar Earnings Fall Amid 'Uncertainties' in U.S. Solar Market.

The administration's immediate appeal shows that it will continue to fight for its perceived right to control tariffs, putting any market decisions into a further holding pattern.

In a statement, White House spokesman Kush Desai said, "It is not for unelected judges to decide how to properly address a national emergency." One point at issue is whether the tariff situation is an actual emergency as defined by law.

The "unelected judges" who heard the case include one appointed by Trump, one appointed by former President Ronald Reagan and one appointed by former President Barack Obama.

Their opinion contends that the "nondelegation and the major questions doctrines provide interpretational tools to avoid constitutional problems in this area. The court maintained, "These tools indicate that an unlimited delegation of tariff authority would constitute an improper abdication of legislative power to another branch of government."

Also at issue is what constitutes a national emergency, as laid out by the 1977 International Emergency Economic Powers Act (IEEPA). The trade court maintained that the act is not a "statute [that] gives a discretionary power to any person, to be exercised by him upon his own opinion of certain facts."

The trade court also said that Trump's tariff imposition actually "responds to an imbalance in trade," which is covered in the Trade Act of 1974, which addresses narrower issues.

In a Washington Post op-ed piece, Gary Winslett, an associate professor at Middlebury, Vermont, said, "The ruling forces the administration back to using slower, more normal statutory authorities ...which come with actual procedural guardrails. Under the IEEPA, Trump could wake up on a random Tuesday, declare a trade emergency for some random reason and impose 50% tariffs that day. This ruling says that behavior was always outside the bounds of the law."

Also on Thursday, U.S. District Judge Randolph Contreras, an Obama appointee, ruled that the International Emergency Economic Powers Act (IEEA) on which Trump had based his tariff-ordering authority, does not indeed give him that power. However, Contreras' order only affected the collection of tariffs from two companies that had sued over the issue.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).