Court’s tariffs ruling offers US businesses a reprieve but they aren’t ready to celebrate

NEW YORK (AP) — Businesses that have been unsettled by President Donald Trump’s on again, off again tariffs grappled Thursday with how much faith to put in the latest reprieve, which came from a federal court that halted most of the taxes on foreign imports.

A three-judge panel of the U.S. Court of International Trade ruled late Wednesday that Trump overstepped his authority when he invoked the 1977 International Emergency Economic Powers Act to declare a national emergency as justification for his wide-ranging tariffs.

The Trump administration has filed a notice of appeal and requested an emergency stay that would keep the tariffs in place during ongoing legal proceedings that are widely expected to reach the U.S. Supreme Court.

Business owners and the National Retail Federation said that without a definitive word in the case, the New York-based trade court’s ruling only creates more uncertainty and makes it harder to budget and plan orders.

“The ruling by the U.S. Court of International Trade blocking most of President Trump’s tariffs is just another chapter in this difficult journey toward a clear, consistent and strategic trade policy,” Jonathan Gold, the trade group’s vice president of supply chain and customs policy, said in an emailed statement. “We urge rapid resolution as this process continues in the courts.”

The president invoked the emergency powers law in early April when he imposed varying import tax rates on products from dozens of countries, including the biggest trading partners of the U.S. After financial markets showed signs of panic, Trump lowered the rate to 10% for every country except China, whose goods were taxed at 145%.

Jonathan Silva, the owner of WS Game Company, said he did not intend to change his plans based on the ruling. He has the board games his company sells made in China,

“We know that this will take time for the appeals process to take place and a final ruling to be instituted,” Silva said. “But we are hopeful that this will be the beginning of a more academic use of tariffs in the coming months and years. All we want to do is have certainty in the environment that we are operating in, as the day-to-day retaliations and pauses are not conducive to business operations.”

The CEO of electronics retailer Best Buy, Corie Barry, told reporters on Thursday that the legal news did not make her more or less optimistic but rather underscored the importance of continuing to remain agile while not changing course in response to near-daily tariff developments.

“I don’t think there’s anything we would do differently based on the news overnight,” Barry said. “What I really tried to work with the team on is to not actually overreact to any given moment in time, but instead to stay maniacally focused on our customers and ensure we are bringing the right assortment, price, and (promotions) to them, whatever the backdrop.”

Barry told analysts that Best Buy has taken a variety of steps to offset higher tariff costs, including pushing vendors to spread out where they do manufacturing. The company is increasing some prices to absorb tariff-related costs, she said, calling the move “a last resort.” She declined to be specific given the fluid situation.

Jim Umlauf, whose business, 4Knines, based in Oklahoma City, makes vehicle seat covers and cargo liners for dog owners and others, said the court ruling did not offer reassurance but only further complicated his decision-making.

“At this point, we don’t know whether the decision will hold, whether it applies to (Trump’s) original 2018 tariffs, or how it will be enforced,” he said. “Without clarity, we’re left planning around a moving target. Like many others, we’ve already locked in quotes and made purchasing decisions assuming tariffs would remain in place. This development, rather than offering relief, introduces new logistical complications at the worst possible time.”

Kelsey O’Callaghan, the founder of a Salt Lake City kitchen and bathroom accessories company called Dorai Home, said she expected the trade war to continue. The constant flux since Trump’s return to office has made her “numb,” but O’Callaghan said she has tried to make educated decisions.

The company already postponed the launch of several new products, laid off the CEO and some other key employees. It paused order shipments from China in early April but resumed some on a staggered basis when the president Trump lowered the rate for Chinese goods to 30% for 90 days.

Now, Dorai Home plans to test price increases to see if shoppers will still buy its products.

“In a business sense, you have to try to create as much certainty and stability as you can with the variables you can control,” O’Callaghan said.

But some businesses were more optimistic. Burlington Coat Factory CEO Michael B. O’Sullivan said Thursday that the tariff pause might help discount retailers like his that buy excess inventory from other retail companies.

The court ruling and continued uncertainty may further fuel a production race that started when the tariff rate for Chinese products were substantially reduced, O’Sullivan said.

“There’s now a huge rush on production and shipping across the industry. Now, the court decision last night could add to that rush,” he said. “Instead of shortages, this topsy-turvy stop/start surge has the potential to create attractive buying opportunities.”