Court Appeal Keeps 10% Global Tariff in Place for Now

The worldwide 10% minimum tariff will remain in effect for now while the federal government appeals a court ruling that found it to be illegal.

The Trump administration issued the 10% tariff after the Supreme Court in February struck down the broader and country-specific tariffs the government attempted to put in place through the International Emergency Economic Powers Act. The new tariffs were invoked under Section 122 of the Trade Act of 1974, which allows the president to impose worldwide tariffs of up to 15% for 150 days. That period will expire on July 24, after which Congress would need to approve an extension.

Small businesses sued to stop the Section 122 tariffs. On May 7, a split three-judge panel of the U.S. Court of International Trade in New York found that the new tariffs were illegal, with the majority writing they were “unauthorized by law.” The Trump administration then appealed the ruling to the U.S. Court of Appeals for the Federal Circuit in Washington. In a procedural win, the court decided that the tariffs can stay in place while the lawsuit makes its way through the legal system.

Even if the federal government prevails in court, the Section 122 tariffs are likely to be lifted by the end of July. To replace the global flat tariff, the Trump administration is expected to establish new section-specific tariffs through Sections 232 and 301 investigations of alleged trade violations. These new tariffs would cover materials such as steel and aluminum, as well as many imports from China.