One day after a three-judge panel at the U.S. Court of International Trade (CIT) ruled that President Trump had misused the International Emergency Economic Powers Act (IEEPA) of 1997, in steps he took to implement tariffs on various consumer and industrial products, including the 10% global tariff on U.S. trading partners, 25% tariffs placed on Canada and Mexico, 30% tariffs on China related to fentanyl and border crisis concerns, the elimination of the de minimis exemption on imports from China and called for a permanent halt of the majority of tariffs and also ruling against future modifications against them, the White House received a reprieve one day later.
That reprieve came in the form of a temporary stay of the White House’s tariffs, following an appeal made by the U.S. Department of Justice to the U.S. Justice Department to the Court of Appeals for the Federal Circuit, which reinstated the tariffs as the appeal is considered, prior to this case moving to the Supreme Court to issue an official ruling on the fate of the tariffs. In terms of next steps, the deadlines for plaintiffs and the federal government to respond are June 5 and June 9, respectively.
These developments come at a time when supply chain decision-makers continue to navigate tariff- and trade-driven uncertainty on various fronts, including: where to invest; how much capital should be allocated for investments; hiring decisions; and the potential need to reconfigure supply chains, among others.
In the meantime, though, supply chain managers and carriers remain without certainty as to the outcome so still can’t really make plans with confidence either way, according to Paul Bingham, Director, Transportation Consulting, S&P Global Market Intelligence.
“Most likely supply chain managers and carriers will continue with what they had been doing recently during the 90-day pauses, in the event the CIT ruling is overturned they’ll be back to where they were before the ruling,” he said. “If the CIT ruling is upheld and those tariffs are overturned, then they may be able to obtain tariff refunds, where the net loss would be having higher inventory carrying costs for having pulled forward inventory, and perhaps paying higher shipping rates than may be available later this year, due to transpacific ocean rates recently increasing with the surge of bookings out of mainland China.”