U.S. Government Maintains 10% Tariff Amid Ongoing Legal Proceedings
The U.S. government will continue enforcing a 10% global tariff that was put into effect in February, as legal disputes surrounding the tariffs make their way through the court system. This decision was upheld by the Court of Appeals for the Federal Circuit in Washington, granting a procedural advantage to the Trump administration. The court stated that the administration’s case has a strong chance of succeeding based on its merits.
Initially, in February, President Donald Trump imposed these temporary 10% worldwide tariffs following a Supreme Court ruling that invalidated broader tariffs he had previously implemented on nearly all countries. These tariffs are authorized under Section 122 of the Trade Act of 1974 and are scheduled to expire on July 24. According to Section 122, the president can impose up to 15% tariffs globally for a period of 150 days. After this period, an extension would require congressional approval.
Section 122 addresses “fundamental international payments problems,” and there is a debate over whether this includes trade deficits, which refer to the imbalance between what the U.S. exports and imports. The Trump administration argues that it does.
Last month, a divided three-judge panel from the specialized Court of International Trade in New York ruled against the 10% global tariffs. After small businesses filed lawsuits challenging the tariffs, the trade court determined, in a 2-1 decision, that President Trump exceeded the tariff powers granted by Congress, rendering the tariffs “invalid” and “unauthorized by law.” This case may eventually be taken to the Supreme Court.
