Federal Appeals Court Upholds Trump Administration Section 122 Tariffs

As Supply Chain Dive reported, a U.S. federal appeals court has ruled that the Trump administration may proceed with collecting the 10 percent Section 122 tariffs it installed earlier this year.

That decision overrules a separate court order that deemed the levies unlawful. (As Connecting the Dots readers will recall, last month the Court of International Trade, CIT, said the Section 122 tariffs were “unauthorized by law” and issued a limited injunction for two importers and the state of Washington, which were among the parties that filed lawsuits against the levy. Read more about that decision, which federal government appealed, at this link.)

More specifically, on June 11 the U.S. Court of Appeals for the Federal Circuit lifted the tariff relief order until the Trump administration’s appeal has been completed. In making its decision, the court questioned CIT’s rationale for the stay, noting that the trade court’s interpretation of Section 122’s requirements “may be incorrect.” The appeals court also found merit in the Trump administration’s argument that blocking tariff collection would cause irreparable harm to the federal government.

The question at hand in the case is whether the Trump administration sufficiently met the requirements of Section 122 of the Trade Act of 1974 needed to institute the new tariffs. That statute allows a president to levy an up to 15 percent tariff for up to 150 days in order to address “balance of payment deficits.” In its order, the CIT called the federal government’s use of Section 122 an “expansive reading of the statute.”