The U.S. government has secured a procedural victory, allowing it to continue collecting the 10% worldwide tariff imposed in February, as legal challenges against the levies proceed through the courts. A federal court ruled Thursday that the tariffs, which are set to expire on July 24, can remain in effect for now.
The decision came from the Court of Appeals for the Federal Circuit in Washington, which concluded that the government’s case was “likely to succeed on the merits.” This ruling temporarily reverses a finding last month by a split three-judge panel of the specialized Court of International Trade in New York, which had declared the 10% global tariffs illegal.
The Basis of the Tariffs
These temporary 10% worldwide tariffs were invoked by the Trump administration under Section 122 of the Trade Act of 1974. This specific section of the law, which had never previously been used to justify import taxes, permits the president to impose global tariffs of up to 15% for a duration of 150 days. Beyond this period, congressional approval is required for any extension.
The administration’s justification for using Section 122 centers on its interpretation of the law’s language, which aims to address “fundamental international payments problems.” The Trump administration contends that this wording encompasses trade deficits—the disparity between what the U.S. exports and imports from other nations.
Legal Challenges and Prior Rulings
The legal battle began when small businesses initiated lawsuits to halt the tariffs. The Court of International Trade in New York had sided with these businesses, ruling 2-1 that the administration had “overstepped the tariff power that Congress had delegated to the president under the law.” The majority opinion from the trade court explicitly stated that the tariffs were “invalid” and “unauthorized by law.”
This current 10% tariff regime followed an earlier attempt by the president to impose even broader double-digit tariffs on nearly every country globally last year, which the Supreme Court struck down in February. The ongoing legal dispute over the current tariffs highlights a significant debate regarding the executive branch’s authority in trade policy.
With the Court of Appeals for the Federal Circuit’s latest decision, the immediate collection of these tariffs is affirmed. However, the underlying legal questions remain unresolved, and the case could ultimately be headed to the Supreme Court for a final determination, extending the uncertainty surrounding these trade measures.
