A federal appeals court ruled Thursday that the U.S. government can keep collecting Trump’s 10% worldwide tariff for now, even as legal challenges move through the courts. The tariffs stem from a February move under Section 122 of the Trade Act of 1974 and are
On Thursday, the federal court’s decision landed like a pause button on a fight that small businesses say could reshape their costs overnight.
The Court of Appeals for the Federal Circuit in Washington ruled that the U.S. government can continue collecting the 10% worldwide tariff imposed in February while legal challenges continue to work their way through the courts. The ruling handed the Trump administration what amounts to a procedural win. with the appeals court concluding its case was “likely to succeed on the merits.”.
At the center of the dispute is a temporary 10% worldwide tariff that President Donald Trump imposed after the Supreme Court in February struck down even broader double-digit tariffs the president had imposed last year on almost every country on Earth.
These newer levies were invoked under Section 122 of the Trade Act of 1974. The tariff authority is time-limited: the tariffs are set to expire July 24.
Section 122 had never been used to justify import taxes before, and the law allows the president to impose worldwide tariffs of up to 15% for 150 days, after which congressional approval is needed to extend them.
The government points to the provision’s stated target—“fundamental international payments problems”—but the legal fight turns on what those words can cover. The specific question in court is whether the phrase reaches trade deficits, the gap between what the U.S. sells to other countries and what it buys from them. The Trump administration argues that it does.
That argument runs into opposition from small businesses who sued to stop the tariffs. A split three-judge panel at the specialized Court of International Trade in New York ruled last month that the 10% global tariffs were illegal. In a 2-1 decision. the trade court concluded Trump overstepped the tariff power Congress delegated to the president under the law.
The majority said the tariffs are “invalid″ and “unauthorized by law.” The appeals court’s Thursday ruling does not end the dispute; it keeps the tariffs in place while the case continues moving through the legal system.
The next step could be the Supreme Court. If the case gets there. the conflict over whether “fundamental international payments problems” can include trade deficits will be at the heart of the argument—this time. under a narrower. temporary tariff scheme that is still operating while judges decide how far presidential tariff authority can stretch.
10% worldwide tariff Section 122 Trade Act of 1974 Trump administration Court of Appeals for the Federal Circuit Court of International Trade trade deficits July 24 expiration Supreme Court