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The U.S. Court of Appeals for the Federal Circuit in Washington ruled this Thursday that the United States government may continue collecting the global 10% tariff imposed in February, while legal challenges against these levies proceed through the courts.
The ruling represents a procedural victory -though not final- for the Trump Administration, concluding that its argument "will likely succeed on the merits."
The origin of the legal battle
This legal dispute began on February 20, 2026, when the U.S. Supreme Court ruled in the case Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act does not authorize the president to impose tariffs, thus invalidating the extensive global and reciprocal tariffs that Trump had applied to nearly all countries in the world since 2025.
In response to that setback, Trump immediately reacted by invoking the Section 122 of the Trade Act of 1974 to impose a new temporary global tariff of 10%, which took effect on February 24, 2026.
This section, which had never before been used to justify import taxes, allows the president to impose global tariffs of up to 15% for a maximum of 150 days, after which Congressional approval is required to extend them.
What does Section 122 say and why is it key?
Section 122 is designed to address what it describes as "fundamental issues of international payments."
The central controversy of the litigation revolves around whether that formulation can be applied to trade deficits—the gap between what the United States sells and buys abroad—as the Trump administration claims.
Critics and lower courts have challenged that interpretation, pointing out that the president exceeded the powers delegated to him by Congress.
The previous setback: The International Trade Court
Last month, a panel of three judges from the New York International Trade Court ruled the global tariffs of 10% illegal, in a split decision of two votes to one, following a lawsuit filed by small businesses, including Burlap & Barrel and Basic Fun!, as well as the state of Washington.
The majority of the court held that the tariffs are "invalid" and "not authorized by law," and that Trump exceeded the tariff powers delegated by Congress.
The decision of the Federal Circuit Court of Appeals now temporarily reverses that ruling, allowing the levies to continue being collected during the litigation.
What happens if the tariffs expire on July 24th?
The tariffs of Section 122 are scheduled to expire on July 24, 2026, 150 days after their entry into force.
An extension would require approval from Congress, a scenario that analysts consider unlikely due to the lack of legislative enthusiasm.
Therefore, the Trump administration is simultaneously working on a more lasting alternative: the Section 301 of the Trade Act of 1974, which has no limit on the size of the tariff and can be extended for up to four years with the possibility of renewal.
The Office of the United States Trade Representative has already opened investigations and public hearings, with a comment period that closes on July 6, 2026, and hearings scheduled for July 7.
The case could reach the Supreme Court
The legal battle is far from over.
Both judicial sources and analysts agree that the case could end up before the Supreme Court, which has already intervened once to halt Trump's tariff policy and will have to rule again if the dispute escalates.
Meanwhile, the federal government continues to collect the 10% tariff based on the provisional authorization from the Court of Appeals, which represents a temporary but significant reprieve for the trade strategy of the Trump administration.
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