A federal appeals court agreed on Tuesday to allow President Trump to maintain many of his tariffs on China and other U.S. trading partners, extending a pause granted shortly after another panel of judges ruled in late May that the import taxes were illegal.
The decision, from the U.S. Court of Appeals for the Federal Circuit in Washington, delivered an important but interim victory for the Trump administration, which had warned that any interruption to its steep duties could undercut the president in talks around the world.
But the government still must convince the judges that the president appropriately used a set of emergency powers when he put in place the centerpiece of his economic agenda earlier this year. The Trump administration has already signaled it is willing to fight that battle as far as the Supreme Court.
The ruling came shortly after negotiators from the United States and China agreed to a framework intended to extend a trade truce between the two superpowers. The Trump administration had warned that those talks and others would have been jeopardized if the appeals court had not granted a fuller stay while arguments proceeded.
At the heart of the legal wrangling is Mr. Trump’s novel interpretation of a 1970s law that he used to wage a global trade war on an expansive scale. No president before him had ever used the International Emergency Economic Powers Act, or IEEPA, to impose tariffs, and the word itself is not even mentioned in the statute.
But the law has formed the foundation of Mr. Trump’s campaign to reorient the global economic order. He has invoked its powers to sidestep Congress and impose huge taxes on most global imports, with the goal of raising revenue, bolstering domestic manufacturing and brokering more favorable trade deals with other countries.
A group of small businesses and a coalition of states in April each sued the Trump administration in the U.S. Court of International Trade, claiming that they faced financial hardship from the president’s illegal actions. The trade court agreed, finding late last month that Mr. Trump had greatly overstepped the bounds of the emergency powers law.
The judges ordered the White House to halt many of its tariffs, including those imposed on China, Canada and Mexico. But the Trump administration immediately appealed the ruling, and judges on the appeals court initially granted the government a temporary stay. That allowed the president’s tariffs to remain in place, while the court weighed a longer-term pause.
It granted that extension on Tuesday, allowing the court to turn next to the legal arguments at the heart of the case — and the extent to which Mr. Trump possesses the sweeping trade powers that he claims.
“We’re disappointed the federal circuit allowed the unlawful tariffs to remain in place temporarily,” said Jeffrey Schwab, a senior counsel at the Liberty Justice Center, which is representing the group of small businesses that sued the administration.
He said in a statement that courts evaluating the merits of the case have “found these tariffs unlawful,” adding that “we have faith that this court will likewise see what is plain as day: that IEEPA does not allow the president to impose whatever tax he wants whenever he wants.”