Appeals court suspends order declaring Trump's global tariff illegal

(Patria) - A U.S. federal appeals court has temporarily suspended a ruling that declared President Donald Trump's 10% global tariff illegal, granting the government's request to halt the decision pending appeal, AFP reported.

Trump imposed the temporary 10% tariff in February, shortly after the Supreme Court overturned many of his global tariffs.

The U.S. Court of International Trade (CIT) blocked the tariffs against two companies and the state of Washington on May 7. That decision was set to take effect on Tuesday.

The U.S. Court of Appeals for the Federal Circuit issued a brief order on Tuesday that included an administrative stay of the CIT's order, setting a schedule for both sides to submit briefs on the matter.

In its request for a stay, the Trump administration argued that the CIT's decision should be suspended until all government appeals are exhausted – up to the Supreme Court, if necessary.

It argued that if it were ordered to refund the 10% global tariff, only for the appeals court to uphold its position, it would be unable to seek economic compensation.

"The plaintiffs, on the other hand, can be made whole by a refund, including interest, if the tariffs are ultimately found to be unlawful and refundable," the government said.

However, the court granted an administrative stay only for the period while the court considers the stay requests pending appeal.

Balance of payments deficit and refunds

The Trump administration said the new tariff was intended to address the balance of payments deficit, citing Section 122 of the Trade Act of 1974.

The 10% global tariff under Section 122 is set to expire at the end of July unless Congress extends it.

The Trump administration has also been seeking other ways to impose tariffs to replace those struck down by the Supreme Court.

U.S. authorities have opened investigations into dozens of trading partners over allegations of forced labor and overcapacity – which could lead to new tariffs or other measures.

Trump's sector-specific tariffs on goods like steel, aluminum, and automobiles remain unaffected by these legal challenges.

The Supreme Court's invalidation of most of Trump's tariffs was a blow to the Republican president, after he had made these levies a signature economic policy.

Since the ruling, companies have rushed to seek refunds.

U.S. Customs and Border Protection (CBP) estimated in March that more than 330,000 importers could be eligible for refunds following the Supreme Court's decision.

Tariffs previously invalidated, imposed under the International Emergency Economic Powers Act (IEEPA), had collected approximately $166 billion in duties and estimated deposits.

On Tuesday, CNBC reported that companies had begun receiving refunds, in line with the CBP timeline released earlier this month.

CBP did not immediately respond to AFP's request for comment.