While Ottawa welcomed a U.S. federal court ruling that would block President Donald Trump's fentanyl-related tariffs against Canada, experts say local businesses are "not out of the woods" yet — especially as an appeals court paused that decision Thursday. The ruling by the lower court on Wednesday would halt the sweeping "Liberation Day" tariffs Trump imposed on around 90 countries in April, along with the economywide duties affecting Canada and Mexico the month prior, when the president declared an emergency at the northern border related to the flow of fentanyl. The original decision had said Trump does not have the authority to wield tariffs on nearly every country through the use of the International Economic Emergency Powers Act (IEEPA) of 1977 — a national security statute that gives the president authority to control economic transactions after declaring an emergency.
The U.S. Court of International Trade had given the U.S. government up to 10 days to comply with the order and remove the tariffs. But the Trump administration filed a notice of appeal soon after the ruling came down from a three-judge panel, which said "any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional." The Court of Appeals for the Federal Circuit temporarily paused that decision, keeping the levies in place for now as the Trump administration fights the order.
Toronto lawyer Sean Stephenson of Dentons, whose practice focuses on international trade and sanctions, called the original ruling a "well-reasoned decision" and a "setback" for the Trump administration. "Relief could potentially come down the line, and we're talking months not years here," said Stephenson. "We are advising importers that have been affected to start gathering your transaction documents …
If the appeals are successful after everything is exhausted, you could be filing a claim for a refund." But he cautioned that "nothing changes overnight" as a result of the ruling, especially while the appeal process unfolds. The plaintiffs have until June 5 to reply to the Trump administration's appeal of the decision.
Stephenson added it's very likely the case could make its way up to the U.S. Supreme Court. "I would tend to agree that we're not out of the woods here," said Stephenson. Business groups in Canada said they didn't feel the original ruling brought any fresh certainty in the immediate term.
The Canadian Chamber of Commerce said that "ultimately, the end of this trade war with the U.S. will not come through the courts" but rather through a new negotiated agreement "that is trusted and respected by all involved."
