Appeals court says U.S. government can keep collecting 10% tariffs for now

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WASHINGTON (AP) — The U.S. government can continue collecting the 10% worldwide tariff it imposed in February while legal challenges to the levies continue to work their way through the courts, a federal court ruled Thursday.

The Court of Appeals for the Federal Circuit in Washington decision handed a procedural win to the Trump administration, concluding that its case was “likely to succeed on the merits.’’

At issue are temporary 10% worldwide tariffs President Donald Trump imposed after the Supreme Court in February struck down even broader double-digit tariffs the president had imposed last year on almost every country on Earth. The new tariffs, invoked under Section 122 of the Trade Act of 1974, are set to expire July 24.

Section 122, which had never been used to justify import taxes before, allows the president to impose worldwide tariffs of up to 15% for 150 days, after which congressional approval is needed to extend them.

Section 122 is aimed at what it calls “fundamental international payments problems.’’ In dispute is whether that wording covers trade deficits — the gap between what the U.S. sells other countries and what it buys from them — as the Trump administration contends.

A split three-judge panel of the specialized Court of International Trade in New York last month found the 10% global tariffs were illegal after small businesses sued to stop them. The trade court ruled 2-1 that Trump overstepped the tariff power that Congress had delegated to the president under the law. The tariffs are “invalid″ and “unauthorized by law,” the majority wrote.

The case could be headed to the Supreme Court.