U.S. Government Can Continue Tariffs Amid Legal Disputes, Court Rules

The U.S. government will continue collecting the 10% worldwide tariff implemented in February. This is due to a new decision by a federal court allowing the practice during ongoing legal challenges.

In Washington, the Court of Appeals for the Federal Circuit provided a procedural win for the Trump administration. The court concluded that the case is likely to succeed on its merits.

The controversy revolves around temporary 10% tariffs applied globally by President Donald Trump. This came after the Supreme Court voided broader tariffs previously enforced. The current tariffs, invoked under Section 122 of the Trade Act of 1974, are due to expire on July 24.

Section 122, unused for import taxes before, grants the president power to impose worldwide tariffs up to 15% for 150 days. After this period, Congress must approve any extension. This section targets fundamental issues in international payments, which the Trump administration argues includes trade deficits—the difference between U.S. exports and imports.

However, a split decision by a three-judge panel of the specialized Court of International Trade in New York declared the 10% tariffs illegal. Small businesses had sued to halt them, and the trade court determined Trump exceeded his delegated authority. The majority wrote the tariffs are both “invalid” and “unauthorized by law.”

The case may progress to the Supreme Court.