WSJ What’s News
U.S. Tariffs Stay in Place as Appeals Court Puts On Hold Earlier Ruling
Thu, 29 May 2025
P.M. Edition for May 29. A federal court has temporarily put on hold a ruling that voided President Trump’s tariffs. WSJ trade and economic policy reporter Gavin Bade discusses what this means for the president’s trade agenda and where the administration goes from here. Plus, Jess Bravin discusses the potential role of the Supreme Court. And Meta and Anduril are teaming up to make high-tech VR/AR headsets for the U.S. Army. WSJ technology and national security reporter Heather Somerville weighs in on why this could be an important move for Meta’s business. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What recent court ruling affects Trump's tariffs?
An appeals court temporarily allows President Trump's tariffs to remain in place. Plus, what yesterday's ruling that voided the tariffs could mean for Trump's trade agenda.
Chapter 2: How do law, politics, and economics intertwine in this case?
What's remarkable about this case is that it really ties in law, politics, and economics are all here inextricably tied. And what the courts do is going to affect the way the markets and the way that trade policy is seen around the world.
And President Trump tells Fed Chair Jerome Powell he's making a mistake by not lowering interest rates. It's Thursday, May 29th. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. President Trump's tariffs are to stay in place for now. In a brief order this afternoon, the U.S.
Court of Appeals for the Federal Circuit said it was pausing yesterday's decision from the Court of International Trade, which, as you heard in this morning's show, ruled that President Trump didn't have the authority to impose sweeping tariffs on virtually every nation until it could hear further legal arguments.
The pause comes as the Trump administration scrambled in search of a stay on the ruling, saying it would take the matter to the Supreme Court before the end of the week if necessary. In a briefing at the White House this afternoon, Press Secretary Caroline Leavitt said the trade court's ruling was part of a, quote, dangerous trend of judges interfering with the president's decisions.
These judges are threatening to undermine the credibility of the United States on the world stage. The administration has already filed an emergency motion for a stay pending appeal and an immediate administrative stay to strike down this egregious decision. But ultimately, the Supreme Court must put an end to this for the sake of our Constitution and our country.
For more on what the court ruling could mean for Trump's trade agenda, I'm joined by trade and economic policy reporter Gavin Bade. So Gavin, which tariffs are affected by the Court of International Trade's ruling and which ones aren't?
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Chapter 3: Which tariffs are currently in effect and which were voided?
Basically, what we're talking about are two broad swaths of tariffs here for the Trump administration. The first is all of those so-called reciprocal tariffs that he promulgated on so-called Liberation Day. Those were invalidated by this ruling, right? And the second is the tariffs that were based on the fentanyl trade, on fentanyl smuggling. That was on Canada, Mexico, and China.
Both sets of those tariffs... were promulgated under the International Emergency Economic Powers Act. And Trump said that that gave him the power to do these global tariffs. And the court said, no, it does not.
And what are the tariffs that aren't affected by this?
Chapter 4: What are the implications for international trade negotiations?
So there are the so-called Section 232. These are national security tariffs on individual industrial sectors. So the steel and aluminum tariffs, the automotive tariffs, the tariffs that are coming down the pike on semiconductors, on lumber, on things like that. So those sector-specific tariffs, that's a totally different legal authority. They were not part of this at all. They remain in effect.
Of course, trade negotiations are still going on, right? So Canada and China have welcomed the court's ruling. The UK, which was the first country to strike a deal with the U.S., has had a more sort of wait and see approach. Why would any country negotiate with the U.S. right now?
There's a couple reasons. The first is that the administration has pledged to, if they can't do tariffs under this authority, they will find other authorities to impose their tariffs. The second one is that those national security tariffs, the sectoral tariffs that we talked about, are still in place. And a lot of countries would love to negotiate their way out of that as well.
So there are still things to talk about here. It does undermine a little bit of the U.S. leverage here. That's what the Trump administration said yesterday. in their filing for the emergency stay on the Court of International Trade decision. They said that that decision severely undermines their negotiating position, undermines their leverage, and that's why they need an immediate stay.
Then you saw Kevin Hassett and others on television today saying, Nothing has changed. Conversations continue. We're still talking to world leaders. So obviously, there's a little bit of tailoring the message for the audience there. But I would say the talks are still on, but they're certainly affected by these latest court decisions.
So if the trade court ruling is upheld, would that then be the end of Trump's trade agenda? Could he use other legal ways to keep tariffs in place?
Certainly not the end. They are actively exploring other options to keep these in place. One interesting option on the table is kind of a twofer, right?
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Chapter 5: Could other legal methods support Trump's tariff agenda?
There's a section of the Trade Act of 1974 called Section 122, and that actually allows you to impose up to 15% tariffs for up to 150 days on countries that have persistent balance of payment issues with the United States, things like the trade deficit that Trump was trying to solve with all these reciprocal tariffs. Now,
The Court of International Trade actually name-checked that section in their opinion and basically said, you should have done this in the first place without saying that explicitly. We could see the Trump administration do that. Now, that would allow them to impose tariffs immediately without an investigation. That's one idea under consideration. There are others as well.
Expanding their use of national security tariffs. That's something they could do. They could also use what's called Section 338, which dates all the way back to 1930 and the Tariff Act then. and actually gives very broad tariff authority for the country to counteract unfair foreign trade practices as well. So there's a lot of different options for them to do this.
They initially chose the kind of boldest, fastest, and riskiest strategy, and we're seeing that that risk didn't necessarily pay off here. But there are a lot of options for them to continue.
That was Wall Street Journal reporter Gavin Bade. Thank you, Gavin.
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Chapter 6: What options does the Trump administration have moving forward?
Thanks, Alex.
We heard how the administration plans to oppose the trade court's ruling all the way to the Supreme Court. WSJ's Jess Braven explains what a potential Supreme Court ruling would mean.
Even when you have lower courts that issue narrower injunctions or injunctions that apply only to the individual parties, if the Supreme Court makes a ruling on what the law requires, then all courts are going to have to follow it. And that's not
In dispute on the tariff thing, certainly we don't know how the Supreme Court would rule, but it is interesting that the Court of International Trade did cite a number of recent Supreme Court decisions that limited the Biden administration's power to do a number of things like involving student debt or COVID relief and so forth.
And similarly, this trade court in New York said that the Trump administration also exceeded its power under these federal statutes. So it is basically some anti-regulatory precedents that came recently from the U.S. Supreme Court are now, for now at least, restricting the Trump administration just like they did the Biden administration before then.
What's remarkable about this case is that it really ties in law, politics, and economics are all here inextricably tied. And what the courts do is going to affect the way the markets and the way that trade policy is seen around the world. So it'll be fascinating to see the interrelations between these different fields of coverage.
Wall Street took the latest tariff news with a grain of salt. Investors were initially enthusiastic after the trade court struck down President Trump's most sweeping tariffs. But by this afternoon, stocks had paired gains. In the end, major U.S. indexes closed higher for the day. The Dow was up about 0.3 percent, and the S&P 500 and the Nasdaq both rose roughly 0.4 percent.
New data from the Labor Department showed that more people newly filed for unemployment claims last week, a larger uptick than economists expected, but one that still kept the claims tally within its recent range. And revised data from the Commerce Department indicated that underlying demand in the U.S. economy grew 2.5 percent in the first quarter, less than previously thought.
Inflationary pressures were also firm. The PCE, or Personal Consumption Expenditures Price Index, rose at an unrevised 3.6% annual rate, up from 2.4% in the previous quarter. Coming up, we've got the rest of the day's news, including how Meta is getting into the defense business. That's after the break.
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