Federal Circuit pauses 10% tariff injunction

Tariffs are back in collection mode — at least for now. On May 12, the U.S. Court of Appeals for the Federal Circuit issued an administrative stay that pauses a lower-court injunction against the administration’s 10% global tariff. That means Customs can keep collecting the duty while the appeals court decides whether a longer stay should remain in place. The move does not settle whether the tariff is legal. It just means the government keeps charging it during the fight. ### What changed this week? Last week, on May 7, the U.S. Court of International Trade ruled 2-1 that the administration had unlawfully used Section 122 of the Trade Act of 1974 to impose a 10% surcharge on nearly all imports. The court entered a permanent injunction for the parties it found had standing — Washington state and the importer plaintiffs — rather than for every importer in the country. Then the government appealed on May 8 and asked for the injunction to be put on hold. (usnews.com) The Federal Circuit granted that short-term hold on May 12. ### What is Section 122, exactly? Section 122 is an old trade-law provision that lets a president impose a temporary import surcharge of up to 15% for no more than 150 days when the country faces serious balance-of-payments problems. The administration used it in Proclamation 11012 on February 20, making the 10% tariff effective February 24 and setting it to run through July 24, 2026, unless Congress extends it. That short fuse is a big part of why the legal timing matters so much. (kelleydrye.com) ### Why did the trade court say no? Basically, the trade court said the administration was using the wrong problem to unlock the statute. Section 122 talks about “large and serious” balance-of-payments deficits as Congress understood that term in 1974. The court said the proclamation leaned on trade and current-account deficits instead, which is not the same thing for purposes of the law. In plain English — the president may have broad trade powers, but not this broad under this statute. (hklaw.com) ### Who had actually won relief? This is the catch. The May 7 ruling was a real loss for the administration on the merits, but the practical relief was narrow. The injunction covered the named importers — Burlap & Barrel and Basic Fun — plus Washington state. Most other importers were still on the hook unless they brought their own cases or found another path to preserve refund claims. The Federal Circuit’s stay now pauses even that narrower relief while the appeal moves ahead. (hklaw.com) ### Why did the appeals court grant only an “administrative” stay? An administrative stay is the court hitting pause so it can sort out the bigger stay request. It is not a final endorsement of the tariff. The government argued that issuing refunds now and trying to claw money back later would be messy or impossible if it ultimately won. It also argued that importers could be made whole later through refunds with interest if the tariff is finally struck down. (tradelawcounsel.com) That logic often carries weight in emergency motions about money. ### Why does July 24 matter so much? Because Section 122 is temporary by design. Even if the administration keeps winning procedural skirmishes, this tariff authority runs out after 150 days unless Congress extends it. Meanwhile, the administration has already been building a replacement track through Section 301 investigations that could support new tariffs before the Section 122 surcharge expires. So the legal fight is partly about refunds and leverage now — but also about what tool comes next. (uk.finance.yahoo.com) ### What should importers take from this? For businesses, the immediate answer is simple — keep paying unless you have case-specific relief. But the bigger lesson is messier. A court has now said this tariff was likely beyond the statute, yet the money keeps getting collected while appeals play out. That leaves importers stuck between cash-flow pain today and uncertain refund rights tomorrow. (hklaw.com) ### Bottom line The Federal Circuit did not bless the 10% tariff. It just kept the administration’s collection machine running while judges decide the next step. For now, the tariff survives on procedure, not on a final win on the law. (usnews.com)