A federal appeals court has temporarily reinstated former President Donald Trump’s broad tariff policy just one day after it was ruled unlawful by a lower court.
The U.S. Court of Appeals for the Federal Circuit granted an emergency motion filed by the Trump administration to pause the injunction, allowing the tariffs to remain in place pending further review.
The decision followed a May 28 ruling by the U.S. Court of International Trade, which declared Trump’s “Liberation Day” tariffs invalid under the International Emergency Economic Powers Act (IEEPA).
The original ruling targeted Trump’s April 2025 order imposing a 10% tariff on most U.S. trading partners, with increased duties on countries like China, Canada, and Mexico.
The trade court argued that the IEEPA, passed in 1977, was designed to address targeted national emergencies and did not give the president the authority to impose such sweeping trade measures without Congressional approval.
The ruling had given the administration 10 days to withdraw the tariffs, but the appeals court’s decision has now placed that timeline on hold.
Trump Tariff Talks Fuels Market Volatility
The appeals court did not provide a detailed explanation but cited national security concerns in its decision to reinstate the tariffs temporarily. Plaintiffs, which include five U.S. businesses and a coalition of 12 states, have until June 5 to respond, with the administration's reply due by June 9.
The White House welcomed the temporary stay, with trade adviser Peter Navarro stating that even if legal challenges succeed, the administration would seek alternative avenues to enforce tariff policy.
This rapid legal back-and-forth has injected new uncertainty into global financial markets. Economists warn that prolonged enforcement of these tariffs could increase operating costs for U.S. businesses and lead to higher consumer prices.
According to a Reuters review, Trump’s tariffs have already contributed to more than $34 billion in added costs and lost sales for American firms.
The legal developments have also had an impact on crypto asset markets. In the past 24 hours, the global crypto market cap fell by 5%, with major cryptocurrencies reacting sharply to growing economic uncertainty. Bitcoin declined by 2.6% to $105,155, while Ethereum dropped 3.9% to $2,621.
According to Coinglass, more than 205,000 traders were liquidated, totaling $691 million in losses. The sell-off can be attributed to market anxiety over potential trade disruptions and inflationary pressure tied to the reinstated tariffs.
