NEW YORK – A federal appeals court on Thursday (29/5) granted a temporary stay of a ruling that declared Donald Trump’s sweeping global tariffs “exceeded presidential authority” and violated federal law.

The initial decision, issued a day earlier by the US Court of International Trade in New York, found that Trump had misused the International Emergency Economic Powers Act (IEEPA) by citing the trade deficit as grounds for a “national emergency”.

A panel of three judges ruled that Trump’s actions were unlawful, affirming that a trade deficit does not constitute an “unusual and extraordinary” threat.

“This tariff order exceeds any authority granted to the president to regulate imports through tariffs,” the judges wrote in their 49-page opinion, as reported by The Guardian on Friday (30/5).

They stressed that the ruling was not about whether the policy was wise or effective, but about its formal legality.

The Trump administration responded swiftly, filing for “emergency relief” to prevent “grave harm to national and economic security”.

White House press secretary Karoline Leavitt accused the judges of “overstepping” and attempting to “seize presidential power”.

“The Supreme Court must stop this,” Leavitt stated.

Not long after that statement, Judge Rudolph Contreras of the District Court in Washington DC also ruled that Trump's tariffs were unlawful. He issued an order to temporarily halt tariff collection from two Illinois-based toy importers.

Trump’s administration had imposed a range of import tariffs without congressional approval, citing national emergency powers. However, courts have now suspended those tariff measures and instructed Trump to issue a new order within 10 days should he wish to proceed.

Global markets reacted positively to the ruling. The US dollar surged against the euro, yen, and Swiss franc. Stock indices in Germany, France, and the UK gained, as did markets in Asia and the US.

The lawsuit was brought by a group of small businesses, including wine importer VOS Selections, along with a coalition of 12 US states led by Oregon.

Oregon Attorney General Dan Rayfield said the ruling “reaffirms the importance of the rule of law — that trade decisions cannot be made solely at the president’s whim.”

Meanwhile, Trump lashed out at the decision on his social media platform, questioning the judges’ motives and claiming the ruling was “based on hatred of Trump,” despite one of the judges on the panel being his own 2018 appointee.

White House Deputy Chief of Staff Stephen Miller called the ruling “a blatant judicial coup”.

The decision casts serious doubt over Trump’s trade strategy, which relied on high tariffs to pressure trade partners, bring back manufacturing, and reduce the US trade deficit, which currently stands at USD 1.2 trillion.

Although not all tariffs are covered by this ruling — such as those on steel, aluminium, and vehicles enacted under other laws — analysts expect further legal challenges to follow.

A Goldman Sachs report stated, “This ruling is a setback to Trump’s tariff agenda and adds uncertainty, though it may not ultimately change the outcome for most of the US’s key trading partners.” (EF/KR/ZH)