Trump’s tariffs hanging by a thread, but will that affect freight?

Back-to-back court rulings have left the fate of many of President Donald Trump’s tariffs up in the air, adding to the confusion and uncertainty surrounding the federal government’s global trade policy.

On Wednesday, May 28, the Court of International Trade ruled that Trump unlawfully imposed certain tariffs, effectively blocking the federal government from enforcing them. However, the Court of Appeals for the Federal Circuit quickly put that judgment on hold while the Trump administration appeals the decision, thereby reinstating the tariffs.

At the center of the legal whiplash are two lawsuits challenging tariffs that Trump ordered by invoking the International Economic Emergency Powers Act (IEEPA) of 1977. Even if the Court of International Trade’s ruling is upheld, Trump still has other avenues by which to reinstate the affected tax on imports.

Several freight experts believe the court ruling may have little effect on trucking freight.

Tariffs and the IEEPA

Several lawsuits claim that Trump has no authority to unilaterally impose tariffs by invoking the International Economic Emergency Powers Act.

The IEEPA gives the president broad authority to regulate international economic transactions after a national emergency has been declared. It requires the president to establish an “unusual and extraordinary threat” to the U.S. that originated outside of the country and poses a danger to national security, foreign policy or the economy.

According to a 2024 Congressional Research Service report, 69 national emergencies invoking IEEPA have been declared. However, all of those are some form of economic sanctions. Before now, a president has never used the law to implement tariffs.

In February, Trump invoked the IEEPA when ordering a 25% tariff on imports from Canada and Mexico, as well as a 20% tax on imports from China. He’s claimed the three countries allow the flow of fentanyl and illegal immigrants into the U.S., creating a national emergency.

Two months later, Trump used the IEEPA to impose a universal 10% tax on most countries and reciprocal tariffs of up to 50% on dozens of nations. He claimed large trade deficits created a national emergency.

The two lawsuits that the Court of International Trade ruled on claim that the IEEPA does not authorize Trump to bypass Congress and unilaterally impose tariffs.

Even if it does, the plaintiffs argued, the reasons articulated in Trump’s executive orders cannot be considered an “unusual and extraordinary threat.”

No president has used IEEPA to place tariffs on imported products, according the Congressional Research Service report. A Court of International Trade panel agreed with the plaintiffs that the law does not allow that. The panel includes three judges appointed by Obama, Reagan and Trump.

“Because of the Constitution’s express allocation of the tariff power to Congress, we do not read IEEPA to delegate an unbounded tariff authority to the president,” the order states.

The Trump administration immediately asked an appellate court to put that judgment on hold while it appeals. That motion was granted, effectively keeping the tariffs intact.

What’s next?

For now, the tariff situation remains unchanged and is likely to persist, despite a final court ruling unfavorable to Trump.

To start, the lawsuit only affects tariffs invoked under IEEPA. Those include tariffs on Canada, China and Mexico, global 10% import taxes and reciprocal tariffs.

All other tariffs – e.g., steel, aluminum and vehicles – fall under Section 232 of the Trade Expansion Act of 1962. That law allows presidents to set tariffs based on national security – but only on the recommendation of the Secretary of Commerce, who has to launch an investigation into the matter first and allow public comments.

If Trump loses the legal battle, he could use the Trade Expansion Act. He could also utilize Section 122 of the Trade Act of 1974, which allows the president to impose tariffs of up to 15% for 150 days on countries with which the U.S. has a large trade deficit. After that, Congress must approve any extension.

How does this affect freight?

Freight movement has been significantly affected by the uncertainty caused by Trump’s trade policy, and these lawsuits may not change that.

Since all of these tariffs are already in effect, most businesses have already adjusted accordingly. In the first quarter of the year, imports surged as companies frontloaded inventories in anticipation of upcoming taxes.

Since then, Trump has walked back or paused tariffs multiple times. Hamish Woodrow, director of strategic analytics at Motive, said companies are less reactive to trade policy news as it is likely to change.

“Based on what we’ve been seeing, we don’t expect another significant boom or disruption during the appeal period – these policy shifts have become too frequent and too unpredictable for most businesses to anchor long-term decisions around them,” Woodrow said. “We expect a more muted impact on freight movement compared to the volatility we saw earlier this year.”

Avery Vise, vice president of trucking at Freight Transportation Research Associates (FTR), echoed that sentiment, stating a court-ordered pause on tariffs could result in an “incremental increase in goods imports.”

“However, much of that pull-forward activity has already occurred and is not likely to match the levels seen in the first quarter of this year,” Vise said. “Ultimately, this ruling would be a positive development for freight if it were the final word on tariffs, but we do not believe that is the case.”

David Spencer, vice president of market intelligence at Arrive Logistics, also does not expect any meaningful changes in import freight unless the original court order clears the Supreme Court, where it will likely go.

“The ruling now raises the possibility that at some point in the nearish future, most tariffs could be completely off the table,” Spencer said. “If there is no need to immediately bring in inventories, some may opt to take a wait-and-see approach with their ordering or at least limit new import orders to those that are essential and hope that they can limit the duties paid on the totality of their imports.” LL