A US federal appeals court on Tuesday temporarily reinstated President Donald Trump’s 10% global tariff, pausing a lower court ruling that had blocked the measure and allowing the import tax to remain in effect while the legal challenge continues.
The US Court of Appeals issued an administrative stay after the U.S. Court of International Trade ruled on Friday that Trump had exceeded his authority under Section 122 of the Trade Act of 1974.
In a 2-1 decision, the trade court said Trump’s proclamation failed to demonstrate that the statutory conditions required to impose tariffs under Section 122 had been met.
“The President’s Proclamation fails to assert that those required conditions have been satisfied,” the court said, adding that the tariffs were “unauthorised by law.”
Trump imposed the across-the-board tariff in January after the US Supreme Court struck down an earlier set of sweeping tariffs he had enacted under the International Emergency Economic Powers Act (IEEPA), ruling that the law did not authorise blanket import duties.
A coalition of 24 states challenging the new tariff argues that Section 122 does not permit the broad use of tariffs in the manner adopted by the administration.
Washington State Attorney General Nick Brown said after Friday’s ruling that “American consumers and businesses … have ultimately paid for the president’s illegal tariff campaign.”
Data released on Tuesday showed consumer prices for several tariff-sensitive goods continued to rise. Apparel and electronics prices increased 0.6% in April, while toy and furniture prices rose 0.8%.
Under Section 122, the tariff can remain in place for up to 150 days unless Congress approves an extension. The current measure is scheduled to expire in July.
The Section 122 case is one of several legal challenges facing Trump’s trade agenda.
Meanwhile, US Customs and Border Protection has begun issuing refunds on tariffs collected under the previously invalidated IEEPA duties. The agency said it expects to refund $35.46 billion on 8.3 million shipments processed as of Monday.
