Halting Trump Tariffs Could 'Catastrophically Harm' Economy, DOJ Tells Appeals Court

The Department of Justice (DoJ) has urged the US Court of Appeals for the Federal Circuit to extend the stay on a U.S. trade court ruling that deemed most of President Donald Trump's tariffs illegal. 

A Bloomberg report said the Justice Department argued that the lower court's May 28 ruling harmed the president's ability to conduct foreign policy. 

In a filing with the Appeals Court, the government argued that blocking tariffs would diminish“America's bargaining position during sensitive trade negotiations, encouraging other countries to hold our nation hostage and catastrophically harm our economy.”

Countering arguments by small businesses and Democrats-led states, the DoJ lawyers said,“Upending the existing tariffs at this critical juncture on the theory that the President can hypothetically impose other (less effective) tariffs later, under other authorities, also does nothing to solve the timing problem: The emergencies are looming now, negotiations are proceeding now.”

The White House signaled that the administration would appeal to the Supreme Court in the event of an adverse Appeals Court.

After announcing the Liberation Day tariffs in early April, Trump paused the implementation of most, except the 10% baseline tariffs, on most trading partners to allow leeway for bilateral trade deals.

Since then, the U.S. has managed to strike deals with the U.K., the European Union, and China, although the agreement with the Asian nation has run into rough weather due to both sides blaming each other for flouting the Geneva agreement.

Talks have resumed between the U.S. and China in London on Monday.

In the absence of mutual agreements between the U.S. and its trading partners, the full tariff rates will kick in by early July. 

The Invesco QQQ Trust (QQQ) ETF and the SPDR S & P 500 ETF (SPY) are up 4% and 2.6%, respectively, for the year.

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