A U.S. federal appeals court has ruled that the Trump administration can continue collecting its 10 per cent global tariff while ongoing legal challenges move through the courts, handing the White House a significant victory in its trade agenda.
The decision by the U.S. Court of Appeals for the Federal Circuit allows the tariffs, imposed in February, to remain in force for now. The court said the administration’s legal arguments are “likely to succeed on the merits,” giving the government temporary authority to continue enforcing the import taxes.
The tariffs were introduced after the U.S. Supreme Court struck down broader tariff measures that President Donald Trump had imposed on nearly every country last year. In response, the administration invoked Section 122 of the Trade Act of 1974 to impose a temporary 10 per cent tariff on imports from around the world.
Section 122 permits a U.S. president to impose worldwide tariffs of up to 15 per cent for a maximum of 150 days without congressional approval. The current tariffs are scheduled to expire on July 24 unless lawmakers authorize an extension.
The legal dispute centres on whether Section 122 can be used to address trade deficits. The Trump administration argues that persistent trade imbalances constitute the type of international payments problem contemplated under the law, while opponents contend the statute was never intended to justify broad-based import taxes.
Last month, a divided three-judge panel of the U.S. Court of International Trade ruled that the tariffs were unlawful after a group of small businesses challenged the measure. In a 2-1 decision, the court concluded that Trump exceeded the authority granted by Congress, declaring the tariffs “invalid” and “unauthorized by law.”
The latest ruling does not resolve the underlying legal battle but ensures the tariffs will remain in place while the case proceeds through the appeals process.
The decision is being closely watched by trading partners, including Canada, as uncertainty continues over the future direction of U.S. trade policy and the potential impact on global supply chains and cross-border commerce.
