Analysis by Energy Workforce President Tim Tarpley
In the ever-unfolding and roller coaster of tariff policies, we got a major announcement this week in terms of US-China tariffs. The President announced Monday via Truth Social that he had signed an executive order that would extend the current “truce” between both countries until November 10th. This announcement came on the heels of prior statements by the President where he indicated that he was pleased with the status of the negotiations and had hinted that a pause could be coming. Practically, this pause means that for now, tariffs on incoming Chinese goods will remain at 30% and US goods entering China will be at 10%. In response, Asian stocks rose this week, and currencies mostly remained stable. Trump told CNBC last week that he felt that the US and China were very close to a trade agreement and he would meet President Xi before the end of the year should a deal ultimately be struck.
As the tariff back-and-forth negotiations continue, it is essential to remember that the legal framework supporting the President’s tariff authority is currently going through the court system. So far, there have been conflicting decisions by a number of federal courts. To enact the so-called “liberation day” or “reciprocal” tariff lines, the President relied on what he argues is his authority under IEEPA, or the International Emergency Economic Powers Act. As part of his Executive Order declaring the use of this authority, the President declared a national emergency (fentanyl trafficking and trade deficits) to support the action. Since this action, a number of cases have been filed around the country challenging this authority. One of those to get the farthest has been V.O.S. Selections Inc. v. Trump, which combines a challenge from a small business importer with a number of other lawsuits from a variety of states. This case has gone before the US Court of International Trade in DC. So far, the court has ruled that IEEPA did not give the President the authority to issue the reciprocal tariffs based on the stated emergencies. This case is currently on appeal, with the ruling paused through the appeal process.
Another case, Learning Resources Inc. v. Trump, has taken the more traditional route and is being heard in the U.S. District Court for the District of Columbia. The court went even further in this case, arguing that IEEPA doesn’t authorize any tariff authority at all. Again, this ruling has been appealed and is currently paused. What does all this mean to us? Well, first, it means that this issue is almost certainly headed to the Supreme Court. If and when the court takes up these cases, the court could grant certiorari and accept the rulings pausing the tariffs or choose to reverse the lower court rulings allowing the tariffs to continue. Perhaps more likely is that the court punts by ruling on procedural grounds and sending the plaintiffs back to the beginning of the process, allowing the tariffs to continue until 2027 or 2028. A split decision is also a possible outcome which would further complicate things. However, we must remember that this timeline will not be fast, even with an expedited ruling requested from the Federal Court it could be June or later in 2026 until the Supreme Court issues its final ruling. That would mean that the tariffs would have been in place for over a year. It is also entirely possible that the White House could continue the tariffs using another authority beyond IEEPA even if the Supreme Court rules against them. Bottom line, while IEEPA surely faces an uphill legal fight in the coming months, we should not expect a quick end to the current tariff structure through the courts.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
