President Donald J. Trump scored a key legal victory Tuesday when the U.S. Court of Appeals for the Federal Circuit granted a stay on a lower court’s attempt to halt his signature tariffs, keeping the duties in effect while the case moves forward.

The decision comes amid a challenge by five small businesses and a coalition of blue-state governments, who claim Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs was unconstitutional. But the Federal Circuit’s ruling keeps the tariffs alive—for now—and sets the stage for a major showdown in Washington, D.C.

At the heart of the case are President Trump’s “Liberation Day” tariffs—10% duties on goods from China, Mexico, and even California. These tariffs were enacted as part of Trump’s aggressive push to restore fair trade, defend American industry, and combat the economic threat posed by foreign manufacturing abuses and narcotics trafficking across the southern border.

The plaintiffs argue that Trump overstepped his authority under IEEPA by bypassing Congress. However, the Trump administration maintains the tariffs are well within the executive branch’s power to declare and respond to national economic emergencies, especially ones involving foreign nations.

“The Trump administration is legally using the powers granted to the executive branch by the Constitution and Congress to address our country’s national emergencies of persistent goods trade deficits and drug trafficking,” White House spokesman Kush Desai told Fox News after the stay was announced. “We look forward to ultimately prevailing in court.”

The Federal Circuit issued a brief but powerful order: the stay was necessary to “maintain the status quo” while the case is reviewed by all active judges in an en banc session—a rare legal move that signals the massive constitutional stakes involved.

The court noted that both sides raised serious legal arguments, and oral arguments are now scheduled for July 31 at 10:00 a.m. at the court's D.C. headquarters.

The Liberty Justice Center, which represents the five businesses challenging the tariffs, admitted disappointment over the temporary stay but welcomed the fast-tracked review.

“Every court to rule on the merits so far has found these tariffs unlawful… IEEPA does not allow the president to impose whatever tax he wants whenever he wants,” said Jeffrey Schwab, the center’s senior counsel.

But the Liberty Justice Center’s optimism faces serious headwinds. Just last week, California Democrats took a loss in court when their separate lawsuit against the tariffs was tossed outright by Judge Jacqueline Scott Corley, a Biden appointee in San Francisco.

In that case, California Gov. Gavin Newsom and Attorney General Rob Bonta argued that the tariffs violated the separation of powers. But instead of even transferring the case to the Court of International Trade, as Trump’s legal team requested, Judge Corley dismissed it altogether, dealing a blow to Democrat hopes of undoing Trump’s economic agenda through the courts.

Multiple courts have now weighed in. A trade court panel in New York and an Obama-appointed judge in D.C. previously ruled that Trump’s tariffs exceeded IEEPA authority. But the Federal Circuit’s action this week resets the playing field.

President Trump’s legal team is now preparing to argue that Congress granted broad discretion to the executive branch under IEEPA, and that restoring American sovereignty in trade policy falls well within that framework.

This is no mere trade dispute—it’s a battle over who gets to define national emergencies, and whether an America-first agenda can survive activist legal challenges in deep-blue jurisdictions.