By Ginika Igboke
The U.S. Court of Appeals for the Federal Circuit on June 11 temporarily extended a pause on a lower court ruling that had struck down President Donald Trump’s 10 percent global tariffs.
In an unsigned order, the appeals court granted the Trump administration’s request to continue a stay of an injunction that would have prevented the collection of the tariffs. As a result, the federal government may continue collecting the duties under Section 122 of the Trade Act of 1974 while the appeal proceeds.
On May 7, the U.S. Court of International Trade ruled 2–1 in favor of several small businesses and states that challenged the tariffs, which took effect on Feb. 24. The majority concluded that the tariffs exceeded the president’s authority under the law, while the dissenting judge argued that it was too early to resolve the dispute.
The challengers contended that the tariffs were an attempt by the Trump administration to work around a Supreme Court ruling that invalidated tariffs imposed under the International Emergency Economic Powers Act.
The trade court struck down the temporary 10 percent value-based import duty that had been added to existing tariffs on most goods entering the United States from countries around the world.
In imposing the tariffs, Trump cited Section 122 of the Trade Act of 1974, which permits the president to impose duties for up to 150 days to address serious balance-of-payments deficits or prevent an imminent depreciation of the U.S. dollar.
The federal government argued that the United States faces a significant balance-of-payments deficit, pointing to a $1.2 trillion annual goods trade deficit and a current account deficit equal to about 4 percent of gross domestic product.
However, the trade court’s majority determined that the president had exceeded the authority granted by the statute. The court declared the tariffs “invalid” and “unauthorized by law,” issuing a permanent injunction that barred the government from collecting the duties from Washington state and the two companies involved in the lawsuit.
The Trump administration appealed the ruling, and on May 12, the Federal Circuit issued an administrative stay, temporarily putting the lower court’s decision on hold while it considered the case.
An administrative stay pauses enforcement of a lower court ruling while an appeals court reviews the issues involved. At the time, the Federal Circuit indicated it was considering a longer-term stay. Its latest order formally grants that stay for the duration of the appeal.
“Without prejudicing the ultimate disposition of these consolidated appeals by a merits panel, we conclude based upon the papers submitted that a stay is warranted under the circumstances,” the court stated.
The Federal Circuit found that the federal government is likely to succeed on the merits of its appeal and could suffer irreparable harm if the stay were denied.
The court also determined that those challenging the tariffs would not face substantial harm from the stay because they could receive refunds, with interest, if the tariffs are ultimately ruled unlawful.
Regarding the public interest, the court said the factor was neutral, noting that the parties had not extensively addressed the issue in their filings.
“Since the majority of the required factors favor the federal government, we grant the motions for stay pending appeal,” the Federal Circuit concluded.
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