The legal ping-pong over Donald Trump's trade agenda just took another sharp turn. On Tuesday, a U.S. appeals court hit the pause button on a lower court’s attempt to kill off the administration's 10% global tariff. This isn’t a final victory for the White House, but it’s a massive blow to the businesses that thought they’d finally caught a break.
If you’re a business owner or an importer, you’ve probably been riding a rollercoaster of "do I pay or don't I?" for months. Last Friday, the U.S. Court of International Trade (CIT) threw a wrench in the gears by ruling that the 10% surcharge was essentially illegal. But before the ink was even dry, the U.S. Court of Appeals for the Federal Circuit issued an administrative stay.
What does that mean for you? It means the tariffs are back on for everyone—including the specific companies that just won their case.
The Section 122 loophole they didn't see coming
Most of the legal drama stems from how these tariffs were created. Back in February, the Supreme Court basically nuked Trump’s previous tariff attempts, which relied on the International Emergency Economic Powers Act (IEEPA). Everyone thought that was the end of it.
But the administration pivoted immediately. They reached into the back of the closet and pulled out Section 122 of the Trade Act of 1974. This specific law allows a president to slap on a 150-day "temporary" tariff of up to 15% to deal with "large and serious" balance-of-payments deficits.
The logic is pretty thin. The CIT judges basically said, "Look, you can't just use a 50-year-old law about currency crises to fix regular trade deficits." They called it an "overly expansive interpretation" of presidential power. But the appeals court doesn't seem ready to let the whole system collapse just yet. They’ve given the administration a temporary shield while they look at the bigger picture.
Who actually pays the bill right now
The craziest part of this ruling is how narrow the "win" was for the opposition. Even when the CIT ruled against the tariffs last week, they didn't issue a nationwide injunction. They only blocked the collection for three specific groups:
- The State of Washington (which pays duties through the University of Washington).
- Burlap & Barrel, Inc.
- Basic Fun, Inc.
Everyone else—millions of other importers—was still stuck paying the 10% while the case moved through the system. Now, with the appeals court stay, even those three lucky winners have to start paying again. It’s a mess.
If you're importing goods today, you aren't getting a refund anytime soon. Customs and Border Protection (CBP) is still collecting under Harmonized Tariff Schedule heading 9903.03.01. Honestly, don't count on that money coming back until at least July, if ever.
Why July 24 is the date to watch
These Section 122 tariffs have a built-in expiration date of July 24, 2026. Trump knows this. The strategy isn't necessarily to win a permanent legal victory; it's to keep the pressure on until they can swap these "temporary" duties for something more permanent.
The U.S. Trade Representative (USTR) is already working on Section 301 investigations. These are focused on things like "manufacturing excess capacity" and "forced labor." The goal is clear: have the Section 301 tariffs ready to go the moment the Section 122 ones expire in July.
It’s a game of musical chairs where the music never actually stops. One set of tariffs gets challenged in court, a new set gets drafted under a different law, and the 10% tax just keeps rolling along.
What you should do immediately
If you're handling landed-cost budgets or managing a supply chain, stop waiting for the courts to save you. The judicial system moves at a snail's pace, and the administration is clearly skilled at using different statutory authorities to bypass roadblocks.
- File "protests" with CBP. If the tariffs are eventually ruled unconstitutional for everyone, you’ll want your paperwork in order to claim refunds. Do not assume they'll just hand the money back automatically.
- Review your contracts. If your shipping terms are DDP (Delivered Duty Paid), you might be okay, but most people are getting hammered by these surcharges.
- Plan for 25% on EU cars. Trump has already threatened to jack up tariffs on European vehicles to 25% by July 4 if they don't play ball on trade deals. The 10% global tariff is just the baseline.
The appeals court gave the plaintiffs seven days to argue against a longer pause. Expect a flurry of filings by next week, but don't expect the tariffs to vanish. This administration has proven they'll fight for every percent, and right now, the courts are giving them the room to do it.
