An appeals court put the brakes on whether the 10% global tariff imposed by the Donald Trump administration was illegal. As a higher court halted enforcement of the first ruling that found the global tariff illegal, the U.S. government can continue collecting the tariff for the time being.
On the 12th (local time), the U.S. Court of Appeals for the Federal Circuit temporarily stayed enforcement of the U.S. Court of International Trade (CIT) ruling that the 10% global tariff imposed by the Trump administration under Section 122 of the Trade Act was illegal. The CIT had ruled on the 7th that the tariff was unlawful, but the higher court swiftly granted the U.S. government's motion to maintain tariff collection during the appeal. The appeals court ordered the parties, including small and midsize businesses that filed suit, to submit related briefs within a week.
After the U.S. Supreme Court ruled in February that reciprocal tariff measures based on the International Emergency Economic Powers Act (IEEPA) were illegal, the Trump administration hurriedly invoked Section 122 of the Trade Act to introduce this tariff as a substitute. But two small importers in the United States and the state of Washington strongly pushed back and filed suit, and the CIT, the first trial court, invalidated the tariff.
The U.S. government immediately filed an appeal on the 8th, the day after the first ruling, to contain a large-scale tariff refund situation. The administration argued in court that "if the first ruling takes effect immediately, countless other importers who have faithfully paid the tariff could demand mass refunds," Bloomberg said. Experts said that with this decision, payment of the 10% global tariff is likely to continue while the parties wage an intense legal battle.
A provisional tariff under Section 122 of the Trade Act can be maintained for up to 150 days. As scheduled, the deadline will fully expire in late July. The Trump administration is said to be buying time with the appeal and plans to introduce a new tariff in full after an investigation under Section 301 of the Trade Act. The U.S. government is currently conducting a heightened Section 301 probe focused on overproduction and forced labor issues in trading partner countries, carefully preparing another large-scale tariff barrier to fill the gap left by the reciprocal tariff.