Appeals Court Temporarily Reinstates Trump’s Tariffs
A federal appeals court has temporarily restored President Trump’s power to impose tariffs by claiming a national emergency.
The Court of Appeals for the Federal Circuit issued a ruling today that stayed yesterday’s May 28 order by the Court of International Trade that halted the national emergency tariffs. While the Federal Circuit has ordered that the tariffs resume, it has not issued a final order interpreting or otherwise ruling on the validity of the president’s tariff orders.
As a result of the appeals decision, tariffs announced by Trump against several dozen nations on April 2 under the moniker of “Liberation Day” can be reinstated. The appellate court decision also means that Trump’s executive orders imposing 25% duties on Canadian and Mexican goods and a 20% tariff on Chinese products over concerns about border security and drug trafficking can continue to go forward.
After yesterday’s decision by the Court of International Trade, the Trump administration immediately filed an appeal to overturn the verdict.
The federal appeals court said a temporary stay allowing the tariffs to go forward would remain in place until it rules on the administration’s request to rescind the trade court’s decision. As both sides prepare written arguments, it is expected the stay allowing the tariffs to remain in place will likely run at least through mid-June.
Adding further confusion on the legal front, a federal district judge today also ruled against Trump’s use of emergency tariffs in a separate case not covered by the federal circuit’s stay. This case will go before a different federal appeals court but the judge has put his own ruling on hold for two weeks to give the administration time to appeal.
Many Tariffs Remain in Place
In addition to the “Liberation Day” tariffs and levies imposed on China, Canada and Mexico to stop the flow of fentanyl coming into the United States, other tariffs that Trump has imposed remain in effect. These include tariffs enacted under Section 232 of the Trade Expansion Act of 1962, which were levied in March to expand existing steel and aluminum tariffs, and place a 25% tariff on foreign auto imports.
Countervailing (anti-subsidy) and anti-dumping duties on Canadian lumber currently totaling 14.5% that were imposed by the U.S. Commerce Department also remain in effect, and these duties are expected to more than double later this year. There is also a pending investigation into the national security threat posed by imported lumber and timber, which may result in additional tariffs at the end of this year.
Tariff Whiplash Has Already Hurt Housing Affordability
The on-again, off-again nature of the tariffs and threats of higher levies have already had a negative effect on housing affordability by creating business uncertainty and disrupting building material supply chains.
When asked about the impact of tariffs on their business in the April survey of the NAHB/Wells Fargo Housing Market Index, 60% of builders reported their suppliers have already increased or announced increases of material prices due to tariffs. On average, respondents reported that suppliers increased their prices by 6.3% in response to announced, enacted or expected tariffs. Builders estimate that these actions on tariffs will add $10,900 to the average cost of a new home.
And in a May survey of builders, 78% reported difficulties pricing their homes recently due to uncertainty around material prices.
NAHB estimates that approximately 7% of all goods used in new multifamily and single-family residential construction originated from a foreign nation in 2024. The cost of building materials has already risen by 41.6% in the five years since the pandemic, which is far higher than the rate of inflation (21.9%).
The situation on the tariff front remains fluid, and the back-and-forth court rulings over the past 24 hours illustrates the need for the Trump administration to seek fair, equitable deals with America’s trading partners that roll back tariffs on building materials.