A US federal appeal court has temporarily halted a lower-court ruling against President Donald Trump’s “Liberation Day” reciprocal tariffs, as well as a separate set of fentanyl-related levies on China, Mexico and Canada, the latest in a string of twists that leave the state of global trade hanging in the balance.

The US Court of Appeals for the Federal Circuit in Washington said in an order Thursday afternoon that it would grant the Trump administration’s request for an immediate stay, stating “the judgments and the permanent injunctions entered by the Court of International Trade in these cases are temporarily stayed”.

A three-judge panel at the New York-based trade court ruled on Wednesday that Trump overstepped his authority by imposing hefty levies on all American trading partners in April and the fentanyl-related duties on China, Mexico and Canada. The trade court’s ruling came after lawsuits were brought by 12 US states, led by Oregon, and five American businesses.

The appeal court has given the plaintiffs until June 5 to submit their responses. The Trump administration can file a reply by June 9, after which the court will deliver its final decision.

Shortly after the appeal court’s order, Trump slammed the trade court’s decision, claiming it ruled “against the United States of America on desperately needed tariffs”.

“Fortunately, the full 11 judge panel on the US Court of Appeals for the Federal Circuit Court has just stayed the order by the Manhattan-based Court of International Trade”, he said on social media.

Despite that, Trump said he hoped that the Supreme Court will “quickly and decisively” reverse the trade court’s decision, which he denounced as “horrible, country threatening”.

“Backroom ‘hustlers’ must not be allowed to destroy our nation!”, he said.

The Trump administration argues that the legality of the president’s emergency declaration on tariffs should not be subject to judicial review, characterising it as a foreign policy matter and a “political question”.

The relief means Trump’s “reciprocal tariffs” on all America’s trading partners, announced in April under emergency powers, can take effect on July 7.

A 10 per cent universal tariff will remain in place – along with an additional 20 per cent tariff on China, Canada, and Mexico – to force action from those countries on fentanyl production and trafficking.

Jeffrey Schwab of the Liberty Justice Center, a US non-profit firm that is fighting the case for the American businesses, called the order “merely a procedural step as the court considers the government’s request for a longer stay pending appeal”.

“We are confident the Federal Circuit will ultimately deny the government’s motion shortly thereafter, recognising the irreparable harm these tariffs inflict on our clients,” said Schwab.

“This harm includes the loss of critical suppliers and customers, forced and costly changes to established supply chains, and, most seriously, a direct threat to the very survival of these businesses.”

Earlier in the day, the Trump administration said it would go to the US Supreme Court as soon as Friday if a lower court did not pause the trade court’s decision from late Wednesday.

White House press secretary Karoline Leavitt slammed the ruling as “judicial overreach” and urged the Supreme Court to intervene.

Trump, Leavitt argued, had used his “full and proper legal authority” in ordering the “Liberation Day” tariffs on April 2 to “address the extraordinary threat to our national security and economy posed by large and persistent annual US goods trade deficits”.

“America cannot function if President Trump, or any other president for that matter, has their sensitive diplomatic or trade negotiations railroaded by activist judges,” the press secretary said.

“These other countries should also know and they do know that [Trump] reserves other tariff authorities, Section 232, for example,” she continued, citing the Trade Expansion Act of 1962 that authorises an American president to adjust imports if they are determined to be a threat to national security.

Since the court ruling blocking the tariffs, US Trade Representative Jamieson Greer had “already heard from countries around the world this morning who said they intend to continue with these negotiations”, Leavitt added.

Meanwhile, a second federal judge on Thursday ruled that the president’s universal tariffs were “unlawful” and issued an injunction.

That decision was narrow in scope, applying only to the two companies that brought the lawsuit, and it limits the government’s ability to collect tariffs from them.

In comments shared before the appeal court temporarily reinstated Trump’s tariffs, Wendy Cutler of the Asia Society Policy Institute, a US-based think tank, said the president’s setback “may lead trading partners to avoid putting meaningful concessions on the table until more legal clarity is forthcoming from US courts”.

Cutler believed trading partners “should not expect a major backing off by the administration on its determination to seek balance and overcome unfairness in our trading relationships”.

Aside from emergency powers, Cutler added, the Trump administration had an “arsenal of other legal tools it could use, including Section 301, Section 232 and Section 122 of the Trade Act of 1974 to address its concerns with trading partners”, citing a law that gives a US president more power in trade agreements and tariffs.

For businesses, “the uncertainty probably will not be resolved soon”, according to Michael Klein of the Fletcher School of Law and Diplomacy at Tufts University in Massachusetts.

“This uncertainty is making companies pause their activities and rethink their longer-term strategies,” Klein said. - SOUTH CHINA MORNING POST