US Appeals Court Reinstates Trump’s 10% Global Tariffs for Now

A federal appeals court has temporarily revived President Donald Trump’s 10% global tariffs, pausing a lower court’s decision that had declared the levies unlawful and renewing uncertainty for more than 170,000 US importers.

The US Court of Appeals for the Federal Circuit on Tuesday issued a temporary stay on a ruling from the US Court of International Trade. The move keeps the controversial tariffs, imposed under Section 122 of the Trade Act of 1974, in effect while the government pursues a full appeal, impacting an estimated $8 billion in monthly import duties collected in March alone.

The Justice Department argued in a Monday filing that allowing the lower court's decision to take effect would “severely undermine” Trump’s trade agenda and divert resources from refunding a separate set of tariffs the Supreme Court previously struck down.

The lower trade court had sided with two companies and Washington state in a 2-1 decision, finding Trump’s use of Section 122 invalid. The court rejected the administration's argument that "balance-of-payments deficits" was a "malleable phrase," ruling that the White House had improperly used trade and current account deficits to justify the tariffs, which took effect in February.

The legal battle leaves thousands of US importers in limbo, having already paid billions since February. While the appeals court considers a longer pause, the administration has signaled it is prepared to take the case to the Supreme Court, extending a contentious chapter in US trade policy that could affect global supply chains and consumer prices through the summer.

A Legal Standoff Over Billions in Duties

The dispute centers on the president’s use of Section 122, a provision of the 1974 Trade Act allowing temporary import restrictions to address balance-of-payments deficits. The Court of International Trade’s ruling against the administration was narrow, initially blocking tariff collection for only the two businesses and Washington state that brought the lawsuit. However, the Justice Department warned that thousands of other importers would likely flood the court with similar claims if the ruling were to stand.

Government lawyers stated that continuing to defend against these claims would siphon resources from the “vast effort” to refund an earlier round of tariffs imposed under the International Emergency Economic Powers Act (IEEPA), which the Supreme Court struck down in January. More than 25,000 importers have already requested refunds for those duties through a recently opened government portal.

The 10% global tariffs under Section 122 were implemented in February following the Supreme Court's decision and are scheduled to expire in July unless extended by Congress. The appeals court has given the plaintiffs seven days to oppose a longer-term pause on the lower court's ruling.

This article is for informational purposes only and does not constitute investment advice.