Late on May 28, the U.S. Court of International Trade blocked most of the global tariffs imposed by President Trump, ruling the move a overstep of authority. Only for the federal appeals court to temporarily reinstate them on May 29 while litigation continues.

In what the Wall Street Journal called the Trump administration’s “first major legal test,” the federal trade court — made up of a three-judge panel — ruled it unconstitutional for Congress to delegate “unbounded tariff authority” to the president. The court originally gave the White House 10 days to complete the process of halting tariffs, which encompasses the ones currently already paused. Read the ruling here.

On May 29, the Court of Appeals for the Federal Circuit issued an order to grant “an immediate administrative stay.” In short: Tariffs continue.

“The stay is likely to run through at least mid-June, according to a schedule laid out by the Federal Circuit judges,” Politico reported.

Two lawsuits brought into question whether the International Emergency Economic Powers Act (IEEPA) — the 1977 law the Trump administration cited to impose its tariffs — gives the President that authority. The trade court said only Congress has exclusive powers to regulate commerce with foreign nations.

The White House Deputy Press Secretary Kush Desai said, as reported by the Associated Press, that the administration remains “committed to using every lever of executive power to address this crisis and restore American Greatness.”

Uncertainty Remains for Distributors

Editor’s Note: As distributors look critically at restructuring operations, managing inventory and adjusting pricing models to align with tariffs, the yo-yo of uncertainty and questionable longevity of these tariffs mucks decision-making and forces pivots that could be costly. MDM will continue to monitor tariff developments.

In the meantime, check out our recent resources on tariff response on MDM Premium:

• How Rockstar CFOs Master Tariff Turbulence (Premium): With today’s tariffs news arriving like surprise album drops, ordinary financial leadership won’t do for distributors. This series examines how to create a “tariff command center” that uses advanced pricing strategies to turn tariff challenges into competitive advantages.
• Distributors Pay the Price When Supply Chains Crack. What’s Your Response?: With global disruption is accelerating, distributors should act now to protect margins, pricing and customer trust before the next supply chain shock hits. Here’s a look at how to respond to global trade policy.
• NAW & MDM Research Shows Tariffs’ Growing Impact on Supply Chain: The results also show that distributors warn new tax increases could add to mounting financial pressures across the industry.
• 3 Practical Ways Distributors Can Successfully Manage Tariffs: In times of economic and market uncertainty, strategies that are practical, realistic and effective under pressure will guide you through the noise. Here, Michelle Duffy details how distributors can successfully manage tariff pass-throughs while protecting profitability and customer relationships.

[Editor’s Note: This article, originally titled “Federal Trade Court Strikes Down Most of Trump’s Tariffs,” was updated on May 29 at 4:30 p.m. to share news that the appeals court reinstated tariffs that were previously blocked.]