Stay extends lower court's 'unlawful' ruling suspension — tariff seen as bridge before Section 301-based levies

An American flag flies near the container ship Ever Memo at the Port of Los Angeles, California, on May 28. [AFP]
An American flag flies near the container ship Ever Memo at the Port of Los Angeles, California, on May 28. [AFP]

The 10% global tariff that Donald Trump deployed to replace his reciprocal tariffs — which a court ruled unlawful — is expected to remain in effect through late July, its scheduled expiration date.

The US Court of Appeals for the Federal Circuit ruled Wednesday to stay enforcement of a lower court decision that had found the 10% global tariff, imposed by the Trump administration in February under Section 122 of the Trade Act, to be unlawful. The appeals court had issued a temporary stay of the lower court ruling shortly after taking up the appeal on May 12. Wednesday's decision extends that stay through the appellate court's final ruling on the merits.

The court said the lower court may have erred in its legal interpretation of the balance-of-payments deficit provisions, and that without a stay the federal government could suffer irreparable harm.

The stay applies only to the two importers that brought the original suit — spice importer Burlap & Barrel and toy importer Basic Fun — as well as the state of Washington.

The lower court had found the 10% global tariff unlawful but stopped short of issuing a universal injunction barring its collection beyond the plaintiffs.

Trump imposed the 10% global tariff under Section 122 of the Trade Act after the Supreme Court ruled in February that his reciprocal tariffs, levied under the International Emergency Economic Powers Act, were unlawful.

The US Court of International Trade ruled on May 7 that the Section 122 tariff was also void for violating the law, and issued an injunction barring its application to the plaintiff importers and Washington state.

Section 122 of the Trade Act authorizes the president to impose tariffs for up to 150 days to address a large and serious balance-of-payments deficit.

The 10% global tariff was intended as a temporary measure, set to expire after 150 days in late July. The Trump administration plans to use that window to conduct investigations under Section 301 of the Trade Act and introduce new tariffs to fill the gap left by the reciprocal tariffs.

In that context, the Office of the United States Trade Representative on June 2 announced the results of a Section 301 investigation into forced labor, signaling plans to impose a 12.5% tariff on South Korea.


yckim6452@heraldcorp.com