On Monday, they filed for a stay with a U.S. appeals court, arguing that lifting the tariffs would undermine ongoing trade negotiations and weaken their effectiveness as a credible threat.

Last Thursday, U.S. District Court Judge Rudolph Contreras issued a preliminary injunction, ruling in favor of two American toy companies, Learning Resources and hand2mind. He determined that the companies would face irreversible harm from the tariffs, implying that the International Emergency Economic Powers Act (IEEPA) did not provide grounds for these tariffs. Following this ruling, the Trump administration quickly escalated the matter to the U.S. DC Circuit Court of Appeals, seeking to overturn the injunction.

The legal battle adds a layer of chaos to the already heated debate over Trump’s tariff policies. The lawsuit, which focuses specifically on tariffs affecting Learning Resources and hand2mind, is one part of a larger legal saga. Another case in the U.S. Court of International Trade could significantly impact Trump's trade strategies and global economic relations.

Previously, on May 28, the niche trade court ruled that Trump exceeded his authority under IEEPA by imposing extensive tariffs. This judgment blocked his "Liberation Day" tariffs and other tariffs directed at China, Mexico, and Canada, intended to combat the entry of fentanyl into the U.S. The administration appealed immediately, leading a federal appeals court to pause the trade court’s ruling within less than 24 hours, thus temporarily restoring Trump's tariff authority.

Contreras’s ruling last week includes a two-week stay, yet he mandated protection for the two toy companies from the tariffs, regardless of the trade court's ongoing deliberations. Richard Woldenberg, CEO of Learning Resources, expressed satisfaction with the district court's decision, anticipating the administration's appeal.

In Monday's filing, the Trump administration contended that the district court lacked the jurisdiction to issue the injunction, arguing that jurisdiction solely belongs to the trade court. The outcome of these legal proceedings will be crucial in determining the future scope and application of Trump's tariffs.