The U.S. Court of Appeals for the Federal Circuit ruled on June 11 that Trump's 10 percent global tariff can stay in place while legal challenges proceed, finding the administration "likely to succeed" on the merits.
The decision stayed a May 7 injunction from the U.S. Court of International Trade, allowing the 10 percent levy imposed under Section 122 of the Trade Act of 1974 to remain in effect across the board while the appeal plays out. The administration had argued the lower court read the law too narrowly. The Federal Circuit agreed, writing that the trade judges "may be incorrect" and that Congress appears to have left the statute's key terms deliberately flexible to give the president room to make economic judgments. The court also found the government faced irreparable harm to its trade policy if collections were halted.
Section 122 is a decades-old provision that lets the president temporarily surcharge imports by as much as 15 percent when the country faces balance-of-payments deficits. Trump signed the 10 percent order in February, setting a 150-day clock that runs out around July 24. When the Court of International Trade struck the tariff down on May 7, it sided with the State of Washington and two small-business importers, Burlap & Barrel and Basic Fun, who had sued to stop collections. Wednesday's ruling keeps collections in place for all importers while the Federal Circuit considers the full appeal.
The administration had already been through one round of this. The Supreme Court earlier invalidated Trump's tariffs imposed under the International Emergency Economic Powers Act, finding they exceeded the emergency authority Congress had granted. Section 122 was the fallback: a narrower but older grant of trade power, and the White House has built its current tariff architecture around courts reading it broadly enough to hold.
The July 24 expiration date gives this fight urgency beyond legal abstraction. If the Federal Circuit rules for the government before then, the administration gains a clear legal foundation to renew or extend the tariff. A loss, or a ruling that arrives too late, likely forces heavier reliance on Section 301 investigations, which allow tariffs tied to specific unfair trade practices rather than broad balance-of-payments authority. Section 301 is slower to invoke but more durable once in place.
For Canada and Mexico, the practical stakes are narrower. Under USMCA, roughly 89 percent of goods qualify for zero tariffs regardless, but Section 122 has applied to the remaining non-qualifying imports since February. A USMCA joint review begins July 1, which could reset rules of origin for autos, agriculture, and digital trade. The litigation and that review together will shape what the trade relationship with both neighbors looks like heading into next year.
China faces a different calculus. Beijing is subject to Section 122 atop existing Section 301 duties running from 25 to 100 percent, producing effective rates between 35 and 110 percent on many categories. A November 2025 agreement extended the US-China tariff truce through November 2026, but that deal sits on top of the underlying tariff stack. Wednesday's stay keeps the baseline in place while both sides continue to negotiate.
The Bigger Question
What the Federal Circuit ultimately decides on the merits, not just this stay, could define the outer limits of presidential tariff authority for years. The Court of International Trade concluded that the balance-of-payments conditions Congress contemplated when it drafted Section 122 in 1974 did not match the conditions the Trump administration cited. The Federal Circuit's signal that framing "may be incorrect" suggests a more deferential reading is coming, one that would give future presidents of either party a broader toolkit to impose temporary surcharges without triggering the constitutional questions that doomed the IEEPA approach.
For now, importers will keep paying the 10 percent levy on non-USMCA goods, and the administration will keep collecting. The full merits ruling, expected before July 24, is the next major marker in a legal fight that has already redrawn the map of presidential trade power.
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