A US appeals court has temporarily reinstated President Trump’s contested 10% global tariff, pausing a lower court ruling that found the administration exceeded its authority under Section 122 of the Trade Act of 1974. The dispute marks the latest legal challenge to Trump’s trade policy and could lead to extended litigation over tariff collections and potential refunds.
The US Court of Appeals for the Federal Circuit issued a short-term administrative stay on 12 May 2026, temporarily halting injunctions against the Trump administration’s 10% global tariff that was imposed under Section 122 of the Trade Act of 1974.
On 7 May 2026, the Court of International Trade issued an Opinion and Order which ruled that President Trump lacked authority under Section 122 of the Trade Act of 1974 to impose a global 10% tariff. The Court issued permanent injunctions halting tariff collection for three plaintiffs—the State of Washington and importers Burlap and Barrel, Inc. and Basic Fun, Inc.—while allowing seven days for arguments over a possible extended administrative stay during the ongoing appeals process.
Court ruling and government response
The US Court of International Trade delivered a ruling on Friday, 8 May 2026, challenging the legal foundation of the tariffs and, in a 2-1 decision, determining that Section 122 was not designed to address trade deficits arising from higher imports than exports. However, the court’s decision only blocked tariff collection for three specific plaintiffs: two small businesses and the state of Washington.
The Trump administration responded swiftly, filing an appeal on the same day and requesting the court to pause its ruling while the federal government pursues its challenge. If the pause is granted, tariff collection would resume for the three importers who brought the lawsuit.
Background and timeline
These 10% global tariffs were introduced in February 2026 as a replacement after the US Supreme Court invalidated previous tariffs that Trump had imposed in 2025 under the International Emergency Economic Powers Act. The current tariffs are temporary measures scheduled to expire on 24 July 2026 unless Congress grants an extension.
President Trump criticised the trade court decision, attributing it to judicial bias, while US Trade Representative Jamieson Greer expressed confidence that the administration would succeed in its appeal. Despite this setback, the administration continues preparing broader tariff measures against major trading partners using Section 301 of the Trade Act of 1974, which addresses unfair trade practices. Three Section 301 investigations are currently underway and expected to conclude in July.
The ruling represents another legal obstacle for Trump’s tariff strategy and could trigger prolonged litigation over billions of dollars in potential tariff refunds.
