A federal appeals court ruled Thursday that the U.S. government may continue collecting a 10 percent worldwide tariff imposed earlier this year, while ongoing legal challenges move forward through the courts.
The decision came from the U.S. Court of Appeals for the Federal Circuit in Washington, which granted the Trump administration a procedural victory. The court said the government’s position was “likely to succeed on the merits,” allowing the tariffs to remain in place for now.
Ruling
The ruling pauses the effect of a lower court decision that had found the tariffs unlawful. Last month, a divided three-judge panel of the U.S. Court of International Trade in New York ruled 2-1 that the tariffs exceeded the authority Congress granted to the president. That court said the levies were “invalid” and “unauthorized by law” after several small businesses sued to block them.
The appeals court did not rule on the ultimate legality of the tariffs. Instead, it determined that the government met the standard required to keep the tariffs in place while the appeal is considered.
Tariffs
The 10 percent tariffs were imposed in February after the U.S. Supreme Court struck down broader double-digit tariffs that President Donald Trump had imposed last year on nearly all trading partners. In response, the administration relied on Section 122 of the Trade Act of 1974 to implement narrower, temporary tariffs.
Under Section 122, a president may impose worldwide tariffs of up to 15 percent for a period of 150 days. Any extension beyond that timeframe requires congressional approval. The current tariffs are scheduled to expire on July 24 unless Congress acts.
Legal Questions
Section 122 has never previously been used to justify import taxes, making its application a central issue in the lawsuits. The provision is intended to address what the law describes as “fundamental international payments problems.”
The Trump administration argues that large and persistent U.S. trade deficits qualify as such a problem. Opponents contend that the statute does not authorize tariffs based solely on trade imbalances, and that Congress did not intend to give the president such broad power.
What’s Next
The case is expected to continue through the appeals process and could ultimately reach the U.S. Supreme Court. Until a final ruling is issued or the tariffs expire, the government is permitted to keep collecting the 10 percent levy on imports.
FAQs
What did the appeals court decide?
It allowed the tariffs to remain in place temporarily.
How large are the tariffs?
They are set at 10 percent worldwide.
What law is being challenged?
Section 122 of the Trade Act of 1974.
When do the tariffs expire?
They are set to expire on July 24.
Could the case reach the Supreme Court?
Yes, that is a possible next step.
