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The U.S. government will be allowed to keep collecting a 10% tariff on imports from around the world while legal challenges proceed, after a federal appeals court signaled the administration is likely to prevail on the central legal question. The ruling keeps the levy in place as the case moves through the courts — and raises the chance the dispute could ultimately reach the Supreme Court.
The Court of Appeals for the Federal Circuit in Washington issued the decision Thursday, granting the administration a procedural victory that preserves the import tax for now. The court said the government’s appeal is likely to succeed on the merits, a standard that allowed collection to continue while litigation plays out.
These temporary duties were imposed under Section 122 of the Trade Act of 1974 after the Supreme Court earlier this year struck down a wider set of double-digit tariffs. Section 122, which has not previously been used to authorize broad import taxes, permits a president to impose global duties of up to 15% for up to 150 days before seeking congressional approval for an extension. The current 10% charge is scheduled to expire on July 24.
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Why the law is contested
The central legal dispute turns on the meaning of a phrase in Section 122 that refers to “fundamental international payments problems.” The administration argues that persistent U.S. trade deficits fall within that language, justifying a worldwide tariff. Opponents and one federal trial court have disagreed.
Last month, a three-judge panel of the U.S. Court of International Trade in New York ruled 2-1 that the 10% tariff was unlawful. That court concluded the president exceeded the authority Congress granted under the statute and labeled the tariffs “invalid” and unauthorized. The appeals court’s recent action, however, keeps the duties in force while that decision is appealed.
- Tariff rate: 10% on imports globally
- Legal authority: Section 122 of the Trade Act of 1974 (temporary authority, up to 15% for 150 days)
- Key dates: Currently set to expire July 24 unless extended or ended by court action
- Court activity: U.S. Court of International Trade found the tariff unlawful; Federal Circuit allowed collection to continue pending appeal
- Next steps: Further appeals possible, with the Supreme Court as a likely eventual forum
The appeals court’s statement that the government is “likely to succeed on the merits” is a provisional judgment about the strength of the legal arguments — it does not resolve the underlying statutory interpretation. Still, the outcome matters now because it suspends the immediate effect of the lower court’s order and keeps the tariff revenue stream intact.
Practical consequences
For businesses and importers, the ruling sustains a cost that can ripple through supply chains and retail prices. Economists say such broad tariffs typically raise costs for U.S. companies that rely on foreign-sourced inputs, and those costs are often passed to consumers.
Trading partners are also affected: a sustained worldwide tariff increases tensions in bilateral trade relationships and could prompt retaliatory steps or new negotiations. For policymakers, the case will test how far the executive branch may go in using a rarely invoked statutory provision to intervene in trade imbalances.
What to watch next: the Federal Circuit’s full opinion and any timetable it sets for resolving the appeal, whether the government seeks an expedited review, and whether the Supreme Court chooses to take up the matter if the appeals court rules against the challengers.
Until those steps play out, the 10% levy remains in place — a temporary but tangible reminder that legal rulings can swiftly alter the landscape for commerce and consumers.
