US appeals court halts order declaring Trump's global 10 per cent tariff illegal: What this means
&imwidth=600&imheight=450&format=webp&quality=medium "US appeals court halts order declaring Trump's global 10 per cent tariff illegal: What this means")
US President Donald Trump Photograph: (AFP)
A US appeals court temporarily paused a ruling that blocked President Donald Trump’s 10-percent global tariffs, allowing the duties to remain in place during the appeal process. The Trump administration argued refunds would be difficult to recover if higher courts later upheld the tariffs.
A US federal appeals court on Tuesday (May 12) temporarily halted a ruling that had declared US President Donald Trump’s 10-percent global tariffs unlawful, agreeing to the administration’s request to pause the decision while the case moves through the appeals process. Trump introduced the temporary 10-percent tariff in February, soon after the Supreme Court invalidated several of his broader global tariff measures. Earlier, on May 7, the US Court of International Trade (CIT) had barred the tariffs from being enforced against two companies and the state of Washington. That ruling was scheduled to come into effect on Tuesday (May 12).
However, the US Court of Appeals for the Federal Circuit issued a short order granting an administrative stay on the CIT decision and laid out a timeline for both sides to submit legal briefs. In seeking the stay, the Trump administration argued that the lower court ruling should remain suspended until all appeals are exhausted, including a possible review by the Supreme Court. The government maintained that issuing refunds for the 10-percent tariffs now could create problems if higher courts later sided with the administration, as recovering those funds would be difficult. Meanwhile, it argued that the plaintiffs could still be compensated later through refunds with interest if the tariffs are eventually ruled illegal. The appeals court clarified that its order is only a temporary administrative pause while it reviews the request for a longer stay during the appeal process.
What this means?
The appeals court’s decision means President Donald Trump’s 10-percent global tariffs will remain in force for now despite a lower court ruling calling them illegal. Businesses importing goods into the US must continue paying the tariffs until the appeal is resolved. The temporary stay also gives the Trump administration time to defend the policy in higher courts, including potentially the Supreme Court. If the administration ultimately loses, affected companies could receive refunds with interest.
Trump's tariff regime
The Trump administration has said the new tariff was meant to deal with balance-of-payments deficits, citing Section 122 of the Trade Act of 1974. The 10-percent global tariff under Section 122 is valid until late July unless extended by Congress.
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The Trump administration has also been pursuing other means to impose tariffs to replace those struck down by the Supreme Court.
US authorities have opened investigations into dozens of trading partners over forced labor and overcapacity allegations -- which could lead to fresh tariffs or other action. Trump's sector-specific tariffs on goods like steel, aluminum and autos remain unaffected by these legal challenges. The Supreme Court's striking down of the majority of Trump's tariffs was a blow to the Republican president, after he made the levies a signature economic policy. Since the decision, businesses have rushed for refunds.
US Customs and Border Protection (CBP) estimated in March that more than 330,000 importers could be eligible for refunds after the Supreme Court's decision.
The tariffs that were struck down earlier, imposed under the International Emergency Economic Powers Act (IEEPA), collected approximately $166 billion in duties and estimated deposits. On Tuesday, CNBC reported that businesses had begun to receive refunds, in line with a CBP timeline released earlier this month.
CBP did not immediately respond to an AFP request for comment.