Appeals court keeps 10% tariff in place
- The Federal Circuit put a temporary stay on a trade-court ruling, so Trump’s 10% global import tariff stays in force while judges weigh the appeal. - The tariff comes from Proclamation 11012 under Section 122, took effect February 24, and was meant to run through July 24 unless Congress extends it. - That means most importers still pay now, even after the trade court said the law likely didn’t authorize this kind of across-the-board surcharge.
Tariffs are back in court again — but for now, the 10% global duty is still alive. On May 12, the U.S. Court of Appeals for the Federal Circuit temporarily paused last week’s trade-court ruling that said the Trump administration’s tariff was unlawful. So the practical result is simple: importers still have to pay while the appeal moves forward. ### What actually changed on Tuesday? The change was procedural, not final. A three-judge panel at the Court of International Trade had ruled on May 7 that the administration’s 10% tariff under Section 122 of the Trade Act of 1974 was unlawful, and it entered relief for Washington state plus two importer plaintiffs — Burlap & Barrel and Basic Fun. Then the Federal Circuit stepped in with an administrative stay, which is basically a pause button while it decides whether that lower-court ruling should stay blocked for longer during the appeal. (abcnews.com) ### What is this 10% tariff, exactly? This is the administration’s temporary global import surcharge under Proclamation 11012. Trump imposed it on February 20, with collections starting February 24, after the Supreme Court knocked out the administration’s earlier tariff program built on IEEPA emergency powers. Section 122 was the backup tool — narrower, older, and capped. It lets a president impose up to a 15% surcharge for up to 150 days when there are serious balance-of-payments problems. (cit.uscourts.gov) ### Why did the trade court say no? The core issue is that Section 122 is not a free-floating tariff power. The Court of International Trade said Congress wrote it for a specific problem — “large and serious” balance-of-payments deficits — and the administration did not justify the tariff in the way the statute requires. In other words, the judges were not saying presidents can never use Section 122. They were saying this use of it looked too broad and too weakly tied to the condition Congress named. (hklaw.com) ### Does the ruling help every importer? Not yet — and that’s the catch. Even before the appeals court pause, the trade-court relief was limited. The injunction applied to the winning plaintiffs, not automatically to every company bringing goods into the U.S. Trade lawyers have been telling clients that most importers should assume the duty still applies unless they are covered by the case or win separate relief. Tuesday’s stay makes that even clearer for now. (cit.uscourts.gov) ### Why does July 24 matter? Because Section 122 itself is temporary. The proclamation was set to run through July 24, 2026, unless Congress extends it. So this case has two clocks running at once — the legal clock and the statutory clock. The court fight could still matter a lot for refunds, future tariff authority, and whether the administration can keep using stopgap trade tools after losing bigger cases. But the tariff also has a built-in expiration date unless lawmakers act. (perkinscoie.com) ### Who feels this first? Importers with thin margins — especially consumer goods, toys, apparel, and specialty food — feel it first, because they have to decide whether to absorb the extra 10%, raise prices, or squeeze suppliers. The broader economy effect is smaller than the earlier tariff regime the Supreme Court struck down, but this still adds friction right into summer ordering and back-to-school inventory planning. That is why the legal technicality matters in real life — cash has to move now, even if the tariff later dies. (hklaw.com) ### So what happens next? The appeals court still has to decide whether to keep the stay in place for the full appeal, and later it will reach the merits. That means Tuesday’s order is not a clean win for either side. It just preserves the status quo while judges sort out whether Section 122 can carry this kind of global tariff at all. For businesses, though, the immediate answer is blunt: pay first, litigate later. (wwd.com) ### Bottom line The legal fight is about presidential tariff power, but the near-term reality is simpler. The trade court said the 10% tariff likely overstepped the law. The appeals court said, not so fast. Until that changes — or July 24 arrives — the tariff stays on the meter. (cit.uscourts.gov) (abcnews.com)
