UPDATE 4:30 EASTERN, May 29, 2025

The tariff relief was short-lived. The U.S. Court of Appeals for the Federal Circuit on Thursday granted a request from President Donald Trump’s administration to temporarily halt the ruling from the U.S. Court of International Trade (discussed in the below article) that had struck down many of the tariffs the White House had implemented in 2025. The upshot is that tariffs that had been voided are again enforceable for the time being. Read the full update here.

A federal court issued a ruling Wednesday, May 28 that strikes down most of the new tariffs that President Donald Trump implemented in 2025.

A three-judge panel from the U.S. Court of International Trade ruled that the president exceeded his legal authority in imposing the tariffs.

Trump invoked the International Emergency Economic Powers Act of 1977 (IEEPA) as the legal foundation for imposing many tariffs this year but the court said that IEEPA “does not authorize the president to impose unbounded tariffs.”

“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the judges said in the ruling. Thus, the court “sets aside the challenged tariffs imposed thereunder.”

The Trump administration is appealing. The case could ultimately make its way to the Supreme Court. Trump could also explore other legal grounds for imposing tariffs.

Still, as of now, the court’s action immediately bars enforcement of: the 25% tariffs on Canadian and Mexican imports not covered by the United States-Mexico-Canada Agreement; the cumulative 30% additional tariff put on China-made imports this year (it had been as high as 145%, prior to a suspension of that rate); the 10% baseline tariff rate on imports from all countries; and the currently paused reciprocal/nation-specific tariffs that Trump placed on particular countries based on duties and alleged trade barriers they have against the U.S. Canadian/Mexican goods covered by USMCA were not subject to levies.

“Should the court’s ruling hold, and the tariffs actually revert back to where they were in January, that would be a win for us all.” Samantha Kates, Spector (asi/88660)

Politico reported that the government could have to refund importers who have paid the voided tariffs. “Anybody that has had to pay tariffs so far will be able to get them refunded,” Ilya Somin, a professor of law at George Mason University, who helped argue a case against the tariffs brought by several small businesses, told Politico.

Note: The court’s ruling doesn’t impact various other tariffs, including Section 301 duties Trump imposed during his first presidential term and tariffs enacted under Section 232 of the Trade Expansion Act of 1962. As such, the 25% tariff on steel and aluminum products, which affects products like drinkware in the promotional products industry, remain in place, as do duties on automotive imports, among other tariffs.

Promo-Eyed View

The tariffs and uncertainty related to them have hurt sales and driven up pricing in the promotional products industry, while also affecting importing and sourcing strategies and raising worries about inventory shortages. Promo pros were still processing news of the court’s ruling late Wednesday and early Thursday.

“It’s too soon to know what, if any, action we should take,” said Samantha Kates, president of Counselor Top 40 supplier Spector (asi/88660). “In the coming days, I anticipate that we will get guidance from our customs brokers and decide at that point the next steps. This is certainly encouraging for our industry. We are simply all eager to get back to ‘work’ and spend less time on tariff analysis. Should the court’s ruling hold, and the tariffs actually revert back to where they were in January, that would be a win for us all.”

“If this ruling holds, it could create more consistency in how trade policy is applied, something that benefits businesses like ours that rely on global manufacturing.” Michael Scott Cohen, Harper+Scott (asi/220052)

Michael Scott Cohen, a member of Counselor’s Power 50 list of promo’s most influential people, said the decision is certainly significant for the merch market but added that much remains uncertain on how things will play out, given the White House’s appeal and potential for the administration to pursue tariffs through other means.

“If this ruling holds, it could create more consistency in how trade policy is applied, something that benefits businesses like ours that rely on global manufacturing,” said Cohen, CEO of Harper+Scott (asi/220052), a Counselor Best Place to Work. “In the short term, it doesn’t change anything about how we operate. We’ll continue working closely with clients to build in safeguards and minimize risk, as well as focusing on designing smart, creative programs that stay within budget, regardless of external variables like tariffs.”

Randy Carr, CEO of Counselor Top 40 supplier World Emblem (asi/98264), also asserted that considerable uncertainty remains over the direction tariffs will take in 2025 and beyond. He said World Emblem’s plan is to stay on the course it’s been on. This consists of diversifying its manufacturing base into different countries and moving forward with reshoring efforts where possible, though the latter is a longer-term process. “I’m a believer in free trade,” said Carr. “I hope the ruling stays.”

“For me, this [ruling] is a good sign that the system can still work the way it’s supposed to, even when things feel uncertain.” Jing Rong, HPG (asi/61966)

As of early May, the tariffs had prompted about 60% of promo suppliers to raise prices, ASI Research showed. Some promo distributors questioned if suppliers would reduce pricing with the tariffs being struck down. Goods brought stateside under the now-removed tariff rates would likely have to be sold at pricing levels that allow suppliers to make a reasonable margin to keep their businesses viable, some executives said. If tariffs stay off the books, it’s possible decreases on promo product pricing could occur. Still, with the ruling new and levy outlook unclear, the pricing impact outlook was cloudy.

“It is still too early to tell if this ruling will hold,” said Power 50 member Trevor Gnesin, CEO of Counselor Top 40 supplier Logomark (asi/67866). “In the meantime, it’s a real pain with the inconsistency of the ups and downs. It is causing havoc trying to buy product not knowing what the goods will land at. We just paid out a million dollars on goods that we released this week. I am assuming the Trump administration won’t let go on tariffs so it has now become a very strategic game of how to plan one’s inventory.”

Tim Behling, vice president of supply chain and sustainability at Counselor Top 40 supplier Gemline (asi/56070), called the court’s kiboshing of Trump’s tariffs “good news for the promo industry.” It doesn’t immediately change Gemline’s approach to the turbulent trade market, though. That approach has focused on purchasing and shipping products utilizing Gemline's diverse supply chain to mitigate and manage impacts from tariffs and trade war fallout, Behling said.

“Going forward,” said Behling, “the challenge will be managing the uncertainty that will surround this legal battle, given that an appeal has already been issued. We are still gathering additional details on the timing and impact to our business.”

Joseph Sommer, CEO of Counselor Best Place To Work Whitestone (asi/359741), hoped the court’s ruling would create space for calmer, more strategic policymaking. Still, he said the ripple effects of tariff policy on promo, the economy and global trade more broadly to date can’t simply be undone.

“We’ve seen suppliers adjust inventories, rethink pricing and reevaluate shipping strategies,” Sommer said. “Freight costs will likely remain elevated, and industry product stock may still be tight heading into Q3 and Q4. Each supplier will be in a different place depending on how they reacted in February, March and April.”

In Sommer’s view, tariffs will be around in some form for what he described as a long time. “The court’s decision brings a bit of relief — but the story is far from over,” Sommer said.

Background & Outlook 

The Court of International Trade nixed many of Trump’s tariffs after hearing arguments in two cases in May. Liberty Justice Center, a Libertarian public interest law firm, sued over the tariffs on behalf of five small business: VOS Selections, Genova Pipe, MicroKits, Terry Precision Cycling and FishUSA. Meanwhile, Oregon and 11 other “blue states” also hit the Trump administration with a lawsuit over the levies. At least five other separate legal challenges have been filed.

“The court’s ruling is a victory not just for Oregon, but for working families, small businesses, and everyday Americans,” said Oregon Attorney General Dan Rayfield. “President Trump’s sweeping tariffs were unlawful, reckless, and economically devastating. They triggered retaliatory measures, inflated prices on essential goods, and placed an unfair burden on American families, small businesses and manufacturers.”

“It is not for unelected judges to decide how to properly address a national emergency.” Kush Desai, White House spokesperson

Trump invoked IEEPA as a legal basis for implementing the tariffs. Attorneys for Trump argued that IEEPA authorizes the president to regulate importations, including the authority to impose tariffs, and that Congress has delegated the president such authority under particular circumstances, such as national emergencies. Trump repeatedly said the United States’ trade deficit and the alleged inflow of illicit fentanyl into the U.S. from nations like China, Canada and Mexico constituted national emergencies.

The courts disagreed, ordering a permanent stop to the tariffs and giving the Trump administration 10 calendar days to issue “necessary administrative orders to effectuate the permanent injunction.”

“Going forward, the challenge will be managing the uncertainty that will surround this legal battle, given that an appeal has already been issued.” Tim Behling, Gemling (asi/56070)

The White House is pushing back. “It is not for unelected judges to decide how to properly address a national emergency,” said White House spokesperson Kush Desai.

In a statement on the ruling, Desai added: “Foreign countries’ nonreciprocal treatment of the United States has fueled America’s historic and persistent trade deficits. These deficits have created a national emergency that has decimated American communities, left our workers behind, and weakened our defense industrial base – facts that the court did not dispute.”

Some analysts suggested that the Trump administration may seek an emergency order from the Supreme Court that would allow tariff enforcement to continue until at least such time as the appeal is adjudicated.

Jack Slagle, founder of customs broker NexINT Global, told CNBC that the fight over tariffs isn’t over. “Even if the Supreme Court doesn’t hold up the tariffs, it doesn’t necessarily mean the end of tariffs on imported goods,” said Slage. “It may not even result in a relative pause of the trade conflict. We can expect that the president and his trade advisors will be reviewing all options.”

Goldman Sachs said in a note to clients that other potential legal levers Trump cold pull to enact his tariff agenda include Section 122 of the Trade Act of 1974, Section 301 investigations and Section 338 of the Tariff Act of 1930. Section 122 doesn’t require a formal investigation before tariffs could be advanced and may be a quick way for the White House to get levies back on the books, analysts said.

“The administration could quickly replace the 10% across-the-board tariff with a similar tariff of up to 15% under Sec. 122,” Goldman Sachs’ analysts stated, adding that such an initiative could only last up to 150 days before requiring congressional action.

The May 28 ruling nixing the tariffs “represents a setback for the administration’s tariff plans and increases uncertainty but might not change the final outcome for most major U.S. trading partners,” Goldman Sachs’ Alec Phillips wrote. “For now, we expect the Trump administration will find other ways to impose tariffs.” 

Jing Rong, vice president of supply chain and sustainability at Counselor Top 40 supplier HPG (asi/61966), also felt the Trump administration would not rest on tariffs. Still, she was breathing a bit easier on May 29.

“I don’t think the Trump administration is going to back down easily and just roll back the tariffs,” Rong said. “That said, I feel a sense of relief seeing that the courts aren’t just rubber-stamping everything the administration does. For me, this is a good sign that the system can still work the way it’s supposed to, even when things feel uncertain.”