The Trump administration has requested the United States Court of International Trade to pause its recent ruling that declared President Donald Trump's latest 10 percent global tariffs unlawful. The move aims to allow the government to continue collecting the levies while the appeal process unfolds.
Government's Appeal Pending
The government's appeal of the decision is currently pending before the U.S. Court of Appeals for the Federal Circuit. In a 2-1 decision last week, the trade court panel found that Trump's use of Section 122 of the Trade Act of 1974 to impose the tariffs was invalid. However, the court only immediately blocked enforcement for two companies that sued and the state of Washington.
Justice Department's Argument
Despite the limited scope of the court's order, the Justice Department argued in a Monday filing that thousands of importers paying the Section 122 tariffs were likely to flood the court with claims. Government lawyers wrote that allowing the decision to take effect would severely undermine Trump's trade agenda and divert resources from the ongoing effort to refund an earlier round of global tariffs struck down by the U.S. Supreme Court.
Court Rejects Administration's Stance
The trade court rejected the administration's position that balance-of-payments deficits, a key criteria for imposing the Section 122 tariffs, was a malleable phrase. The court found that Trump's proclamation imposing the levies failed to identify such deficits within the meaning of the 1974 law, instead using trade and current account deficits as substitutes.
Potential Supreme Court Appeal
The Justice Department indicated in Monday's filing that if the trade court and the Federal Circuit refuse to pause the ruling, the administration is prepared to make an emergency request to the Supreme Court. The justices earlier this year struck down Trump's global tariffs under a different law, the International Emergency Economic Powers Act (IEEPA).
Impact on Importers
Since Trump's proclamation took effect in February, more than 170,000 importers have paid deposits to cover new tariffs under Section 122 on 13 million entries of goods, according to the government. U.S. customs authorities collected roughly US$8 billion in Section 122 tariffs in March alone, based on government data analyzed by We Pay the Tariffs, a coalition of small businesses.
Administration's Justification
U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick submitted declarations to the court on Monday, arguing for keeping the tariffs intact until they are set to expire in July. Greer stated that the levies are critical to keeping trade partners engaged in negotiations. Lutnick described them as the only global baseline currently restraining an unprecedented spike in import flows while the administration continues to address the United States' balance of payments issues.
