Appeals court allows Trump administration to continue collecting global 10% tariff

A U.S. federal appeals court has permitted the Trump administration to continue implementing a 10% global tariff. This levy was introduced in February, following the Supreme Court's decision to invalidate a significant portion of the administration's prior tariff structure. The appellate court's decision on Thursday grants a temporary reprieve to the Trump administration, allowing the tariffs to remain in effect while the legal process unfolds.

The tariffs, enacted under Section 122 of the Trade Act of 1974, are currently set to expire at the end of July unless extended by Congress. In May, a panel of the International Trade Commission in New York had ruled 2-1 against these tariffs, deeming them "invalid" and "unauthorized by law." The panel concluded that Trump had exceeded the tariff authority delegated by Congress. Section 122, which had not previously been used to justify import taxes, grants the U.S. president the power to impose global tariffs of up to 15% for 150 days, requiring legislative approval for any extension.

Following the Supreme Court's setback, Trump had threatened in February to raise the new tariff to 15% on U.S. trading partners, though this has not yet occurred. The Supreme Court had ruled that the president lacked the authority to impose these specific rates under the International Emergency Economic Powers Act (IEEPA) of 1977, which formed the basis for much of Trump's aggressive tariff policy during his first term. In April, the U.S. government initiated the process to refund approximately $166 billion collected unlawfully through the tariffs that the high court had nullified.

The Supreme Court's ruling specifically impacts tariffs the U.S. government refers to as "reciprocal," which were imposed by Trump with the aim of reducing the U.S. trade deficit. This decision also affects additional 25% tariffs placed on Mexico and Canada, intended to pressure those countries into curbing fentanyl flows.