A U.S. federal appeals court on Thursday reinstated U.S. President Donald Trump’s sweeping 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.
The United States Court of Appeals for the Federal Circuit in Washington’s order 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.
Here’s a recap of the day:
4:30 p.m. EDT: White House will impose tariffs even if it loses in court
White House trade adviser Peter Navarro said on Thursday that the Trump administration will seek to enact tariffs through other means if it ultimately loses the court fights over its trade policy.
Speaking to reporters at the White House, Navarro said that U.S. tariffs would remain in place for now following a court stay and that the administration is still in talks with other countries to continue trade negotiations.
2:50 p.m. EDT: U.S. corporate profits post largest drop since 2020
The number of Americans filing new applications for jobless benefits increased more than expected last week and the unemployment rate appeared to have picked up in May, suggesting layoffs were rising as tariffs cloud the economic outlook.
The report from the U.S. Labor Department on Thursday showed a surge in applications in Michigan last week, the nation’s motor vehicle assembly hub. The number of people collecting unemployment checks in mid-May was the largest in three and a half years.
The dimming economic outlook was reinforced by other data showing corporate profits declining by the most in more than four years in the first quarter, pulled down by nonfinancial domestic industries.
Economists said the tariff ruling, while it offered some relief, had added another layer of uncertainty over the economy.
“This is a sign that cracks are starting to form in the economy and that the outlook is deteriorating,” said Christopher Rupkey, chief economist at FWDBONDS.
Lucia Mutikani, Reuters journalist.
2:30 p.m. EDT: Second court hands down order blocking tariffs
Another federal judge is blocking Trump’s use of an emergency powers law to impose tariffs.
The preliminary injunction from U.S. District Judge Rudolph Contreras comes after a lawsuit from two Illinois-based educational toy companies, Learning Resources Inc. and hand2mind.
They say the tariffs may force them to raise their prices by 70 per cent “as a matter of pure survival.”
The injunction only applies to those two companies. Contreras, who was appointed by U.S. President Barack Obama, delayed its enforcement for two weeks.
The ruling was handed down the day after a similar, broader finding from a three-judge panel on the U.S. Court of International Trade.
At least seven lawsuits have been filed over the tariffs.
The Associated Press
1:45 p.m. EDT: ‘Nothing’s really changed?’
Trump’s trade advisor Peter Navarro told Bloomberg Television: “Nothing’s really changed.”
Kevin Hassett, director of the National Economic Council, told Fox Business that although officials have other options that would “take a couple of months” to implement, they are not planning to pursue these right now.
He insisted that “hiccups” because of decisions by “activist judges” would not affect negotiations with other trading partners, adding that three deals are close to finalization.
Trump’s global trade war has knocked markets with import levies aimed at punishing economies that sell more to the United States than they buy.
He argued that resulting trade deficits and the threat posed by drug smuggling constituted a “national emergency” that justified the widespread tariffs -- which the court ruled against.
AFP
1:38 p.m. EDT: White House ready to fight in U.S. Supreme Court
“We expect to fight this battle all the way to the Supreme Court,” said White House Press Secretary Karoline Leavitt.
The government will first need to appeal the ruling in the U.S. Court of Appeals for the Federal Circuit before going to the U.S. Supreme Court.
In the meantime, Leavitt said the Trump administration would comply with the order, though she claimed the government has other authorities to impose tariffs should it need to.
Luca Caruso-Moro, CTVNews.ca journalist
1:28 p.m. EDT: ‘The courts should have no role here,’ says White House
White House Press Secretary Karoline Leavitt is reading a prepared statement responding to the court ruling.
“The courts should have no role here,” she said, calling the ruling part of “a troubling and dangerous trend” of judicial influence on Trump’s actions.
“America cannot function,” she said, when “sensitive diplomatic or trade negotiations” are “railroaded by activist judges.”
Luca Caruso-Moro, CTVNews.ca journalist
1 p.m. EDT: TSX down, U.S. markets mixed
Canada’s main stock index fell and U.S. markets were mixed Thursday as they reacted to the court decision.
The S&P/TSX composite index was down 61.53 points at 26,22192.
In New York, the Dow Jones industrial average was down 66.61 points at 42,032.09. The S&P 500 index was up 11.47 points at 5,900.02, while the Nasdaq composite was up 94.47 points at 19,195.41.
The Canadian dollar traded 72.40 for cents US compared with 72.33 cents US on Wednesday.
The Canadian Press. Read the full story here.
12:50 p.m. EDT: 10 days to comply
William Pellerin, international trade lawyer at McMillan LLP, tells CTV News that the White House has 10 days to comply with the court’s ruling, and cease collecting duties.
When asked for clarity on whether the tariffs will still be in place at the end of that period, Pellerin said: “At least for the next 10 days, the tariffs are in place, and then beyond that, we’re going to learn more in the next few days as to whether the U.S. administration is able to prolong or play games to keep those in place while they pursue the appeals.”
Lynn Chaya, CTVNews.ca journalist
12:15 p.m. EDT: Canada ‘not out of the woods’ yet
While Ottawa is welcoming a U.S. federal court decision that would block President Donald Trump’s fentanyl-related tariffs against Canada, experts say local businesses are “not out of the woods” yet.
Toronto lawyer Sean Stephenson of Dentons, whose practice focuses on international trade and sanctions, cautions that “nothing changes overnight” with this ruling, especially given the appeal process that awaits.
Even if the ruling is eventually upheld, he says Trump could potentially try to use a number of alternative levers at his disposal to reimpose tariffs against Canada and other countries that were ruled unconstitutional under the emergency justification.
Business groups in Canada also say they don’t feel the ruling brings any new certainty in the immediate term, with the Canadian Chamber of Commerce adding that “ultimately, the end of this trade war with the U.S. will not come through the courts” but rather through a new negotiated agreement.
The Canadian Press. Read the full story here.
12 p.m. EDT: White House: Trump pledged to put ‘America First’
“It is not for unelected judges to decide how to properly address a national emergency,” reads a statement from White House Spokesperson Kush Desai.
“President Trump pledged to put America First, and the Administration is committed to using every lever of executive power to address this crisis and restore American Greatness.”
The Trump administration used of a key piece of legislation reserved to combat national emergencies: the International Economic Emergency Powers Act (IEEPA). But the court ruled the tariffs fall outside of its provisions.
For example, the act grants the president powers to “deal with an unusual and extraordinary threat.”
According to the court, it only applies when the threat wholly or substantially originates outside the U.S. The president must then declare a national emergency related to that threat, and the use of IEEPA to directly “deal with” it.
The White House declared a national emergency soon after Trump’s inauguration, claiming in part that Canada failed “to do more to arrest, seize, detain, or otherwise intercept (drug trafficking organizations), other drug and human traffickers, criminals at large, and drugs.”
Trump then imposed tariffs against Canada, but the court argued those levies didn’t appropriately “deal with” that threat.
Therefore, they’re outside the bounds of the U.S. Congress’s delegation of authority though IEEPA, according to the court.
“We do not read IEEPA to delegate an unbounded tariff authority to the President,” reads the ruling.
Luca Caruso-Moro, CTVNews.ca journalist
11:30 a.m. EDT: Plaintiffs applaud tariffs ruling
Lawyers for small businesses who challenged Trump’s “Liberation Day” tariffs are applauding the ruling that struck them down.
“It’s great to see that the court unanimously ruled against this massive power grab by the president,” said Ilya Somin, a George Mason University law professor who worked on the case with the libertarian-leaning Liberty Justice Center. They represent small businesses who said the tariffs were a major threat to their livelihoods.
Victor Schwartz, a small wine importer, calls the ruling a “win” for his businesses and others across the country. He said he’s ready to see the case through the Supreme Court as the Trump administration appeals.
The Associated Press
11 a.m. EDT: Carney ‘welcomes’ ruling
Addressing the House of Commons Thursday morning, Carney said the decision “is consistent with Canada’s long-standing position that the U.S. IEEPA tariffs were unlawful as well as unjustified.”
Carney added that Canada’s “trading relationship with the United States is still profoundly and adversely threatened” by “unjustified” tariffs on steel, aluminum and the auto sector.
“It therefore remains the top priority of Canada’s new government to establish a new economic and security relationship with the United States and to strengthen our collaboration with reliable trading partners and allies around the world,” he said.
The tariffs on steel, aluminum and the auto sector remain in place because they were implemented under a different U.S. law.
The Canadian Press. Read the full story here.
Analysis: Tariffs, and Trump’s entire economic agenda, were just thrown into chaos
A U.S. federal court’s ruling late Wednesday against President Donald Trump’s authority to levy some of his most sweeping tariffs may have also dealt a serious blow to the president’s entire economic agenda.
Trump’s core economic policy has been his historic tariffs, but the administration has described its aggressive trade actions as just one leg of a three-legged stool. Built on tariffs, spending cuts and tax cuts, Trump’s economic agenda relies on all three components to stand strong.
The three-legged economic stool just lost a leg, at least for now. The court, in its ruling, noted Trump has alternate, if imperfect, tools at his disposal to impose tariffs — tools that multiple White House officials told CNN they are considering and that economists widely expect the administration to make use of in the coming days. The Trump administration has appealed and plans to take the case all the way to the U.S. Supreme Court if need be, even as it hopes for an emergency stay, the officials said.
There is no sense that the court ruling will lead the administration to change course. Between appeals and alternatives, Trump will probably double-down on his trade efforts, according to allies inside and outside the White House.
“The courts are a pretty obvious foil across the board and we haven’t backed down on anything else so far,” one official said.
CNN. Read the full story here.
Wall Street higher after court blocks tariffs
Stocks are rising on Thursday after a U.S. court blocked many of President Donald Trump’s sweeping tariffs, though the gains got less strong as trading progressed from Asia to New York.
The S&P 500 was 0.6 per cent higher in morning trading, and it pulled within 3.6 per cent of its all-time high set earlier this year. It had dropped roughly 20 per cent below the mark last month, when fears were at their worst about whether Trump’s trade war would drive the economy into a recession.
The Dow Jones Industrial Average was up 80 points, or 0.2 per cent, as of 10 a.m. EDT, and the Nasdaq composite was 0.9 per cent higher.
The gains were even bigger in Asia, where markets had the first chance to react to the ruling late Wednesday by the U.S. Court of International Trade in New York. It said that the 1977 International Emergency Economic Powers Act that Trump cited for ordering massive increases in taxes on imports worldwide does not authorize the use of tariffs.
The Associated Press. Read the full story here.
