The Trump administration’s threat to impose 50 percent tariffs on the European Union and steep tariffs of varying sizes on other critical American trading partners hung in limbo on Thursday after a panel of U.S. federal judges blocked a set of across-the-board charges.
But both trade experts and America’s trading partners around the world greeted the news with caution, not celebration.
Stocks rose internationally as investors hoped the decision, handed down by the U.S. Court of International Trade, might restrain the assault that Washington is waging on world markets. President Trump’s top aides had told the court in recent days that an adverse ruling could weaken the administration’s negotiating position and imperil ongoing talks.
Yet economists pointed out that Mr. Trump could turn to other legal routes to enact across-the-board tariffs. The administration has already filed plans to appeal the decision.
Given that, the court’s move offered only a fragile chance at reprieve for economies like those of Australia, Britain, Canada, the European Union and India. And it all but guaranteed continued chaos.
On the one hand, Washington has been using the threat of sky-high tariffs, enacted unilaterally by the president and without congressional approval, as a cudgel in trade discussions; that might now be a somewhat diminished tool.
But on the other, it was not clear whether the reprieve would be sustainable or if the Trump administration would quickly find a way to work around it. The court decision was therefore poised to set off days of scrambling, as the United States tries to reinstate tariffs and global partners watch to see whether that will be possible.
“The real sense I’m getting in Europe is that they’re planning for the worst and hoping for the best,” said Georgina Wright, a senior fellow at the German Marshall Fund who specializes in policy in Europe.
In a trade drama replete with uncertainty, she said, “this is just another episode.”
America’s trading partners reacted carefully to the news. Don Farrell, Australia’s trade minister, said his nation would “study this ruling” while noting that “they may be subject to further legal processes.” In Britain, a government spokesman said that the court ruling was a domestic issue for the United States and noted that this was only the first stage of legal proceedings.
The European Commission, the executive arm of the European Union, declined to comment altogether.
There is a reason for that muted response. The court’s decision, announced late Wednesday, does nothing to roll back sector-specific tariffs on steel and aluminum and on cars or to forestall future tariffs on pharmaceuticals.
That could leave the United States and trading partners in Europe and elsewhere negotiating intensively on those economically important sectors in coming weeks.
“The question about trying to find a solution is still there,” said Ignacio García Bercero, a nonresident fellow at the think tank Bruegel who was formerly a top trade negotiator at the European Commission.
The court decision does block — at least temporarily — a set of across-the-board tariffs that Washington enacted on a range of trading partners after an early April announcement. Those tariffs are now set to 10 percent, but they are poised to ratchet up to higher levels that vary by country in early July, after a 90-day “pause” that the Trump administration enacted to allow for negotiations.
Mr. Trump has been using a novel interpretation of the International Emergency Economic Powers Act, a 1977 law, to impose those sweeping levies. But the court said the legislation did not grant him “unbounded authority” to enact tariffs.
The ruling gives the administration 10 days to halt collection of the tariffs in question. That is probably not enough time for the Trump administration to successfully challenge the ruling in appeals court — and, potentially, to appeal again to the Supreme Court — according to analysts at Goldman Sachs.
Still, that doesn’t mean the tariffs will definitely lapse.
The administration could “quickly replace” the 10 percent tariffs with a tariff of up to 15 percent for 150 days using another trade rule, the Goldman analysts wrote. After that, such tariffs would require congressional approval.
Mr. Trump’s administration could also open investigations into critical trading partners, which it could then use as the basis for more sustained tariffs. Such investigations, which focus on issues like unfair trade practices, take weeks or months to complete.
“We expect the Trump administration will find other ways to impose tariffs,” Alec Phillips, an economist at Goldman, wrote in his firm’s analysis.
But Asian and German stock indexes climbed after the news, a sign of optimism that big multinational corporations might see relief. And some officials did express reason for hope.
Brando Benifei, chair of the delegation for relations with the United States at the European Parliament, said that even if it was not the final word, the court challenge underscored that waging a trade war via large, presidentially imposed tariffs may not be sustainable.
“It creates further pressure on U.S. counterparts to actually be reasonable,” he said, speaking from Washington, where he had traveled to meet with American officials.
Derren Nathan, head of equity research at the financial services company Hargreaves Lansdown, wrote in a report, that “the latest development is unlikely to be the last twist in the tale.”
“The world will be watching closely,” he added.
Reporting was contributed by Victoria Kim from New York; Tony Romm and Ana Swanson from Washington; and Mark Landler and Stephen Castle from London.
Jeanna Smialek is the Brussels bureau chief for The Times.
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