Court halts Trump's plan, an analysis of its impact and future development

According to the ruling by the U.S. Court of International Trade (CIT) on May 28, 2025, the Trump administration's "Liberation Day" tariff policy, originally scheduled to take effect on June 1, has been immediately halted. The court ruled that its invocation of the International Emergency Economic Powers Act (IEEPA) to implement comprehensive tariffs was an overreach. Below is an analysis of the current status and subsequent implications:

I. Current Legal Effect

1. Tariff Suspension

The CIT's ruling has immediate legal effect, requiring U.S. Customs and Border Protection to cease enforcement of the relevant tariff policy. This means the planned 10% baseline tariff and higher rates (e.g., the 34% tariff on China) will not take effect, reverting to the original tariff levels prior to the policy announcement.

2. Basis for Reverting to Original Tariffs

The court explicitly ruled that Trump lacked the authority to unilaterally impose tariffs via IEEPA, so the halted tariff policy automatically becomes void, and trade partners' tariffs will revert to the standards before April 2, 2025.

II. Future Possibilities

1. Government Appeal Path

The Trump administration may appeal to the Federal Circuit Court of Appeals or the Supreme Court, but must meet the following conditions:

◦ If the appeal does not obtain a stay, the tariffs will remain suspended.

◦ If the appeal succeeds and the Supreme Court overturns the CIT ruling, tariffs may be reinstated, but the legal community generally considers the chances of success in this case to be low.

2. Alternative Plans

The White House may shift to targeted tariffs (e.g., only on specific countries or goods) to circumvent the court's rejection of "comprehensive tariff overreach."

III. Impact on Businesses and Markets

• Short-term benefits: Cost pressures ease for import-dependent businesses (e.g., retailers, manufacturers), and U.S. stocks have already risen due to the ruling (Dow futures up nearly 500 points).

• Long-term uncertainty: If the government appeals or adjusts policies, trade friction risks remain.

Conclusion

Currently, Trump's "Liberation Day" tariffs cannot be enforced, and rates have reverted to original levels. Whether they will be permanently scrapped depends on appeal outcomes or congressional legislative action, but a short-term policy restart is unlikely.