A federal appeals court temporarily reinstated on Thursday the most drastic tariffs imposed by Donald Trump, a day after a trade court ruled that the president exceeded his authority when imposing the tariffs and ordered their immediate blocking.
The United States Court of Appeals for the Federal Circuit in Washington did not offer any opinion or reasoning in its order, but asked the plaintiffs in this case to respond by June 5, and the administration by June 9, according to Reuters.
The surprising decision made on Wednesday by the U.S. Court of International Trade threatened to cancel or at least delay the imposition of tariffs from Trump's "Liberation Day" on the majority of U.S. trading partners, as well as import duties on goods from Canada, Mexico, and China, based on his accusation that these three countries facilitate the flow of fentanyl into the U.S.
On Thursday, senior officials in the Trump administration downplayed the impact of the decision, expressing confidence that it would be overturned on appeal and insisting that other legal avenues are available in the meantime.
The White House also stated that Wednesday's decision does not in any way interfere with negotiations with key trading partners, scheduled for the coming days. A fourth round of talks with Japan is set for Friday in Washington, and a team of Indian trade negotiators will travel to the U.S. next week for discussions.
How did the markets and the dollar react
Wednesday's decision by the International Trade Court was well received by markets in Europe and Asia, which appreciated it.
On the other hand, the dollar fell on Thursday, with investors preparing for American President Donald Trump to fight against the decision of the American trade court that blocked most of the tariffs he proposed.
Financial markets, which have reacted strongly to every twist in Trump's chaotic trade war, responded cautiously optimistically to the trade court's decision, although stock gains were largely limited by expectations that the court decision will face a potentially lengthy appeal process.
In fact, analysts have stated that there remains a general uncertainty about the future of Trump's imposed tariffs, which have cost companies over $34 billion, according to a Reuters analysis.
Symbolic of this uncertainty, another federal court found on Thursday that Trump exceeded his authority by 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 separate tariffs of 25% on goods from Canada, Mexico, and China related to fentanyl. However, the decision was much more limited, and the tariff suspension order applied only to the toy company that brought the lawsuit.