The Trump administration has requested a stay in a second court ruling challenging the huge tariffs it has imposed under emergency powers.
In a dispute involving two US toymakers, the administration requested that a US appeals court stay a preliminary injunction issued last week. According to the filing on Monday, stopping the tariffs would undermine the tariffs as a “credible threat” and jeopardise trade negotiations with other countries.
Judge Rudolph Contreras of the US District Court ruled on Thursday that US President Donald Trump’s tariffs will cause irreversible damage to Learning Resources and hand2mind, two American family-owned toy companies. Additionally, the judge ruled that the International Emergency Economic Powers Act (IEEPA), which Trump used to implement most of his tariffs, had no provisions for tariffs. The ruling was swiftly appealed to the US Circuit Court of Appeals by the Trump administration.
The decision increased the uncertainty surrounding Trump’s economic strategy during a chaotic litigation week over his tariffs. A larger legal dispute that started in the US Court of International Trade is developing, with possible ramifications for Trump’s trade policies and the global economy, even though the complaint brought on behalf of Learning Resources and hand2mind primarily addresses tariffs that apply to the two businesses.
President Trump’s “Liberation Day” tariffs and those imposed earlier this year against China, Mexico, and Canada to stop the entry of fentanyl into the United States were blocked on May 28 when the niche trade court ruled that he had overstepped himself in enforcing the sweeping tariffs under the IEEPA.
The Trump administration appealed the ruling immediately, and a federal appeals court halted it less than twenty-four hours later, temporarily regaining Trump’s authority to impose tariffs under the act. A combined judgment was rendered by the trade court in two distinct cases: one brought by 12 Democratic state attorneys general, led by Oregon, and the other by wine importer V.O.S. Selections and four other small firms.
Last Thursday, Contreras, the judge in the case filed on behalf of the toy companies, granted a two-week stay on his ruling. However, he mandated that the two businesses be shielded from tariffs regardless of the outcome of the trade court lawsuit.
Richard Woldenberg, CEO of Learning Resources on Monday said that he anticipated an appeal from the administration. “We’re very gratified by the ruling of the district court and believe the reasoning of the district court will be upheld,” he noted.
The Trump administration said in Monday’s filing in the dispute involving the toy companies that the trade court is the only one with jurisdiction and that the district court “lacks jurisdiction.”