Federal appeals court keeps Trump’s 10 percent global tariff in place for three importers during appeal – JURIST

The US Court of Appeals for the Federal Circuit on Thursday granted the Trump administration’s motion to stay a lower court injunction against its 10 percent global tariff, allowing the government to keep collecting the duties from three importers that had won relief while the appeal proceeds.

The per curiam order keeps in place a 10 percent surcharge that President Donald Trump imposed in February under Section 122 of the Trade Act of 1974, a balance-of-payments provision that no president had invoked since its enactment. The US Court of International Trade had ruled on May 7 that the surcharge exceeded the president’s statutory authority and permanently enjoined its collection, but only as to the three plaintiffs found to have standing: the state of Washington, which imports through the University of Washington, and two private businesses, spice importer Burlap and Barrel and toy manufacturer Basic Fun.

Applying the four-factor test from Nken v. Holder, the court found that three of the factors favored the government and that the fourth, the public interest, was neutral. On the merits, the court said the government had made a sufficient showing that it is likely to succeed, expressing skepticism toward the trade court majority’s reading of the statute. The trade court had concluded that a “balance-of-payments deficit” under Section 122 is limited to three technical measures, liquidity, official settlements, and basic balance, an interpretation the appeals court said the legislative history calls into question. The court also found the government had shown likely irreparable harm absent a stay, crediting its argument that other importers would file follow-on suits seeking the same relief if the injunction stood. The court noted that at least two such cases had already been filed. It further reasoned that refunds with interest would adequately address any harm to the plaintiffs should the tariffs ultimately be held unlawful.

The order is non-precedential and does not resolve the underlying appeal. The court was explicit that it was not offering its own interpretation of Section 122 and was not prejudging the merits panel’s ultimate disposition:
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. In reaching this conclusion, we have considered the traditional four stay factors: (1) whether the movant has made a strong showing of likelihood of success on the merits; (2) whether the movant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.

Trump imposed the Section 122 surcharge on February 20, the same day the US Supreme Court ruled in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act does not authorize the president to impose tariffs, striking down his earlier reciprocal and country-specific duties. The Section 122 measure took effect February 24 and is set to expire July 24 unless Congress extends it. A coalition of 24 states sued over the surcharge in March, and their case was consolidated with the importers’ challenge on appeal.

The stay returns the three plaintiffs to paying the surcharge alongside every other importer while the Federal Circuit weighs the appeal on the merits.