What Happened: The U.S. Court of Appeals for the Federal Circuit granted a temporary stay, preserving Trump’s “Liberation Day” tariffs on most trading partners and separate duties on Canada, China and Mexico. The court scheduled oral arguments for July 31 and ordered the full 11-member panel to hear the case due to its “exceptional importance.”

The decision reverses two lower-court rulings that struck down the tariffs. On May 28, the U.S. Court of International Trade ruled unanimously that Trump exceeded his authority by using the International Emergency Economic Powers Act (IEEPA) to impose the duties. The three-judge panel stated the Constitution grants Congress, not the president, the power to levy tariffs.

Why It Matters: The tariffs generate approximately $200 billion annually and include 10% across-the-board duties, 20% on Chinese imports, and 25% on non-USMCA goods from Canada and Mexico. The fluctuating nature has created market volatility and supply chain disruptions for companies managing production and pricing strategies.

Goldman Sachs analysts noted Trump could reimpose similar tariffs “within days” using Section 122 trade law, which allows 15% tariffs for 150 days without congressional approval. The ruling has no impact on tariffs levied under traditional legal authority, such as steel and aluminum duties.