What just happened?
On 28 May, the US Court of International Trade (CIT) issued a permanent injunction blocking President Trump’s recently imposed “Liberation Day” tariffs – a 10% across-the-board levy on all imported goods and higher “reciprocal” rates for specific trading partners. The court ruled that the administration had exceeded its authority under the International Emergency Economic Powers Act (IEEPA). In clear terms, the judges reaffirmed that Congress – not the White House – controls taxation on imports. Importantly, this ruling did not impact sector-specific tariffs previously implemented under other laws, such as the 25% tariffs on steel and aluminum under Section 232.
How did the administration respond?
The White House moved swiftly. Within hours, the Department of Justice filed an appeal to the US Court of Appeals for the Federal Circuit, along with an emergency request for a stay of the injunction. Officials dismissed the CIT ruling as “judicial overreach,” while senior trade adviser Peter Navarro suggested the administration was also preparing to invoke alternative statutory authorities to continue exerting tariff pressure on foreign exporters.
And then – less than 24 hours after the initial ruling – the legal situation reversed again.
What changed?
Late on 29 May, the Federal Circuit granted an immediate administrative stay, which reinstates the 10% blanket tariff and associated surcharges – for now. This stay is temporary but significant: it allows US Customs and Border Protection (CBP) to continue collecting duties while the appeal proceeds. The appeals court will decide by mid-June whether to extend the stay throughout the duration of the appeal process. Until then, importers remain liable for duties at the border, and the legal status of the tariffs hangs in limbo.
A Stay of Tariffs – and of Certainty
Legal clarity remains elusive. Over the next two weeks, the US Court of Appeals for the Federal Circuit will determine whether to extend its temporary stay of the CIT ruling that struck down President Trump’s 10% import tariffs. That ruling had briefly suspended the levies before the appeals court reinstated them within 24 hours. A full hearing on the merits is expected in the summer, with a likely appeal to the Supreme Court in late 2025 or early 2026.
In practical terms, the duties remain in place and enforceable. Refunds are off the table for now.
The implications are threefold:
First, cash-flow disruption is significant: some $34 billion in duties remain locked up on corporate balance sheets, with no short-term resolution on the horizon.
Second, diplomatic overtures, particularly by the European Union, have encountered renewed challenges. The initial CIT ruling had emboldened EU negotiators to press for sector-specific exemptions, especially ahead of the upcoming OECD ministerial meeting in Paris. However, the appeals court’s decision to temporarily reinstate the tariffs has tempered that momentum. EU Trade Commissioner Maroš Šefčovič emphasized the importance of sustained communication, stating that “delivering forward-looking solutions remains a top EU priority” . Despite the legal uncertainties, EU officials maintain that the bloc’s strategy remains unchanged, with ongoing efforts to de-escalate trade tensions and reach mutually beneficial agreements .
Third, the markets have noticed. The modest rally triggered by the CIT’s initial decision gave way to a swift reversal after the stay was granted—another sign that tariff policy is now a key driver of investor sentiment.
For firms navigating this terrain, uncertainty is no longer a passing phase; it is the structural condition under which trade decisions must now be made.
Strategic takeaways for businesses and economic development professionals
- Scenario-plan dual tariff regimes: Maintain updated cost models assuming both presence and absence of the 10% blanket tariff and monitor Federal Circuit proceedings weekly.
- Focus on existing sector-specific duties: These remain fully in force and continue to shape investment and supply chain strategies – particularly in advanced manufacturing.
- Use the window to lock in commitments: Legal uncertainty gives foreign governments and EDOs an opportunity to secure investment agreements before more targeted or permanent measures are introduced.
- Agility, not accuracy, wins: Waiting for clarity is no longer viable. The ability to pivot—geographically, operationally, and politically—is now the defining competitive advantage.
The CIT ruling clipped the wings of President Trump’s most sweeping tariff experiment – but within a day, the appeals court re-extended them. This legal back-and-forth is not an aberration – it’s the new baseline. Whether these duties survive the full appeal or not, the administration has clearly signaled it will persist with aggressive trade enforcement, using whichever tool passes legal muster.
The only certainty now is uncertainty.
To prepare, exporters and investors must:
- Build real-time monitoring teams or retain advisors who can track court, CBP, and USTR actions daily.
- Institutionalize dual-scenario landed-cost models in finance and logistics systems.
- Accelerate localization, friend-shoring, or “last-touch” US operations that minimize tariff exposure.
Volatility favors the prepared. Treat every court ruling, every tariff headline, as a signal to climb the watchtower – scan the horizon, recalibrate, and be ready to act first.
