A US federal appeals court issued a temporary administrative stay on Tuesday, reinstating President Donald Trump's 10% global import tariff after the US Court of International Trade struck it down last week, extending a legal battle over the outer limits of presidential trade authority that has already drawn in the Supreme Court and placed $35.46 billion in tariff refunds in procedural limbo.
The trade court ruled 2-1 on 7 May that Trump's 10% global tariff — imposed in January 2026 following the Supreme Court's earlier decision that blanket tariffs could not be authorised under the International Emergency Economic Powers Act — was also unlawful, this time under Section 122 of the 1974 Trade Act. The court found that the administration had failed to demonstrate the conditions required by Section 122 had been met, stating in its ruling that 'the President's Proclamation fails to assert that those required conditions have been satisfied.'
The appeals court's administrative stay, issued on Tuesday by the United States Court of Appeals for the Federal Circuit, is temporary and does not constitute a ruling on the merits of the case. It allows the tariff to remain in effect while the court considers the full appeal. Consumer price index data released this week underscored the tariff's impact on households: apparel and electronics prices rose 0.6% and toys and furniture 0.8%, moves that economists attributed in significant part to the cost of the levy filtering through supply chains into retail prices.
A coalition of 24 US states brought the legal challenge, arguing that Trump had exhausted one trade authority after another as courts struck them down and that no remaining statutory basis existed for an across-the-board global import tax of this kind. The coalition's attorneys said the administration's approach amounted to an abuse of executive power that harmed consumers and businesses in every state. The White House argued that Section 122 of the 1974 Trade Act provided clear authorisation for the tariff and that the lower court had applied an excessively restrictive reading of congressional intent.
The litigation came as the Trump administration was conducting separate trade negotiations with China. China's exports in the first quarter of 2026 grew 14% year-on-year to $977.6 billion, even as exports to the United States fell 16% over the same period, with Chinese exporters having systematically redirected supply chains toward Southeast Asia — where exports rose 20% — Africa, where they grew 32%, and Europe, which recorded a 21% increase in Chinese imports. An upcoming summit between Trump and President Xi Jinping is being watched by global investors as a potential turning point in the trade standoff between the world's two largest economies.
The legal uncertainty is causing significant operational difficulty for US importers, many of whom restructured their supply chains to absorb earlier rounds of tariffs, only to face the prospect of costs shifting again if courts ultimately strike down the current levy. Several major retail industry associations said on Tuesday they welcomed the lower court's ruling in principle but that the stay meant consumers would continue to face elevated import costs in the near term. The government confirmed separately that $35.46 billion in refunds for tariffs collected under the earlier IEEPA authority are in the process of being returned to importers following the Supreme Court ruling.
Section 122 of the 1974 Trade Act caps any tariff imposed under its provisions at 150 days, meaning the current 10% tariff is scheduled to expire in July unless Congress votes to extend it. The Trump administration has indicated it will seek an extension. The full appeal is expected to be heard and decided before the expiry date, setting up a potentially definitive ruling on presidential trade power within weeks.