The Trump administration has asked for a pause in a second court ruling challenging its sweeping tariffs invoked under emergency powers.
The administration asked a US appeals court to stay a preliminary injunction from last week in a case that affected two US toymakers. The filing Monday argued that halting the tariffs would threaten trade negotiations with other nations and undercut the tariffs as a “credible threat.”
Last Thursday, US District Court Judge Rudolph Contreras ruled that two American family-owned toy companies, Learning Resources and hand2mind, would be irreparably harmed by Trump’s tariffs. The judge also ruled that there was no provision for tariffs in the International Emergency Economic Powers Act, under which Trump enacted the majority of his tariffs. The Trump administration quickly appealed the ruling to the US DC Circuit Court of Appeals.
The ruling came during a chaotic legal week for Trump’s tariffs, adding to the uncertainty around his economic vision. Though the lawsuit filed on behalf of Learning Resources and hand2mind only focuses on tariffs applying to the two companies, a broader legal case that began in the US Court of International Trade is unfolding, with potential implications for Trump’s trade policies and the global economy.
On May 28, the niche trade court ruled that President Donald Trump overstepped his authority to impose the sweeping tariffs under IEEPA, blocking his “Liberation Day” tariffs and tariffs placed earlier this year against China, Mexico and Canada, designed to combat fentanyl coming into the United States.
The Trump administration immediately appealed that ruling, and less than 24 hours later a federal appeals court paused the ruling, temporarily restoring Trump’s ability to levy tariffs under the act. The Court of International Trade had issued a joint judgement on two separate cases: one filed by wine importer V.O.S. Selections and four other small businesses and one by twelve Democratic state attorneys general led by Oregon.
Contreras, the judge in the case filed on behalf of the toy companies, issued a stay on his ruling for two weeks last Thursday. But he ordered the two companies be protected from tariffs regardless of how the case before the trade court played out.
Richard Woldenberg, CEO of Learning Resources, told CNN Monday he was expecting the administration to appeal. “We’re very gratified by the ruling of the district court and believe the reasoning of the district court will be upheld,” he said.
In Monday’s filing in the toy companies case, the Trump administration said the district court “lacks jurisdiction” and that the trade court exclusively has jurisdiction.
CNN’s David Goldman and Dan Berman contributed to this report.
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