Court Lets Trump 10% Tariffs Stand While Appeal Is Considered

A containership at the Port of Savannah in Savannah, Ga. (Megan Varner/Bloomberg)

A federal appeals court has temporarily paused a ruling that declared President Donald Trump’s latest global tariffs unlawful, as the judges weigh the administration’s request to allow officials to keep collecting the levies while the legal fight continues.

The U.S. Court of Appeals for the Federal Circuit issued a brief order May 12 entering what’s known as an administrative stay and set a fast schedule for both sides to file briefs on the administration’s request to leave the tariffs intact while it appeals. The small businesses and Democratic state officials who sued are due to respond in a week.

The order means importers will continue to pay the 10% tariffs under Trump’s use of Section 122 of the Trade Act of 1974 for now.

In its ruling earlier this month finding the Section 122 tariffs invalid, the U.S. Court of International Trade had only blocked the government from enforcing the levies against two small businesses that sued and Washington state. 

But the Justice Department argued against allowing the broader judgment declaring the tariffs policy unlawful to remain in place while it appeals. The government said that would undermine the president’s economic agenda, interfere with trade negotiations with foreign governments and pull already-stretched resources from the effort of processing refund claims for an earlier round of tariffs that the Supreme Court struck down.

Government lawyers predicted that if the ruling against the Section 122 tariffs took effect right away, it would spur the thousands of other importers who have been paying them so far to flood the trade court with their own lawsuits.

Sara Albrecht, CEO of the Liberty Justice Center, one of the groups involved in the litigation, said in a statement that the temporary pause from the Federal Circuit “creates more uncertainty for American small businesses and our plaintiffs that have already spent the last year absorbing unlawful tariff costs and fighting to recover their own money.”

In separate litigation, a trade court judge has been overseeing efforts by customs authorities to develop a refund process after the Supreme Court struck down Trump’s use of an emergency economic powers law to impose global tariffs. A new online claims portal went live in late April, and the administration is processing $35.5 billion so far in refunds and interest, according to a report filed in court May 12 by a customs official. The government previously has said that importers paid approximately $166 billion in those contested tariffs.

The cases are Oregon v. Trump, 26-cv-1472, and Burlap and Barrel Inc. v. Trump, 26-cv-1606, U.S. Court of International Trade (Manhattan).