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By Dan Gooding
Associate News Editor
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The Trump administration was handed a temporary win on tariffs Thursday, as an appeals court allowed some of the fees imposed by the White House to remain in effect while a legal battle continues.
President Donald Trump introduced a range of tariffs on imports in 2025, arguing this was a way to ensure manufacturing returned to the United States from overseas and to punish countries that were not cooperating with the U.S. on the world stage. Multiple lawsuits followed, challenging the president's authority to impose the tariffs in the first place.
Thursday's decision by the U.S. Court of Appeals for the Federal Circuit stayed a block on so-called Section 122 tariffs, which were set at 10 percent, while the case is heard in full. The court also found the administration could suffer irreparable harm—including disruption to U.S. trade policy—if the tariffs remained blocked.
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“We conclude that the federal government has made a sufficient showing that it is likely to succeed on the merits,” the panel wrote, indicating skepticism toward the lower court’s reasoning.
The case was brought by a coalition of more than 20 states, led by Oregon, along with small businesses including Burlap & Barrel and Basic Fun, which challenged the legality of the tariffs.
Newsweek reached out to the White House for comment via email Thursday afternoon.
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What the Case Is About
The dispute centers on the administration’s use of a decades-old trade law, which allows tariffs to address U.S. “balance-of-payments deficits.” The Court of International Trade had ruled that the administration exceeded its authority, finding the statutory trigger did not apply and blocking the tariffs.
On Thursday, the Federal Circuit suggested that interpretation may have been too restrictive, saying the lower court’s reading “may be incorrect.”
The opinion signaled support for a broader understanding of the law, emphasizing that Congress may have intentionally left key terms flexible “to afford some discretion” in how such economic conditions are measured.
What It Could Mean for Consumers
For consumers, the immediate impact of the court’s decision is indirect but potentially significant, as the reinstated tariffs are likely to flow through supply chains and affect prices.
Because the ruling allows the tariffs to remain in place during the appeal, U.S. importers, including retailers and manufacturers, may once again face higher costs on affected goods. Companies often pass at least part of those costs on to consumers, meaning prices for certain imported products could rise in the short term.
The court itself acknowledged that businesses may face operational and financial strain from paying the tariffs, including “lost profits” and “constraints on growth,” even though those harms could later be offset by refunds if the plaintiffs ultimately prevail.
When Was the 10% Tariff Imposed?
The Trump administration imposed the 10 percent global tariff after the Supreme Court struck down earlier tariffs that had relied on emergency powers.
The new duty was framed as a stopgap measure, intended to preserve tariff revenue and maintain pressure on trading partners while the administration explored alternative legal pathways for longer-term trade restrictions.
What Is Section 122 of the Trade Act of 1974?
Section 122 of the Trade Act of 1974 allows a president to temporarily impose tariffs of up to 15 percent for up to 150 days in response to a serious balance-of-payments deficit.
The provision is rarely used and contains limited definitions and guardrails, including no clear explanation of what qualifies as a “balance-of-payments” crisis—an ambiguity that became central in the legal challenge.
Under the statute, any tariffs beyond the initial period require congressional approval, making it a short-term tool rather than a long-term trade policy mechanism.
What Happens Next
A future decision by the appeals court will determine whether the tariffs were lawfully imposed. For now, however, businesses and states affected by the policy must operate under its continued enforcement.
The order makes clear the outcome of the case remains unresolved, stressing that the decision to grant a stay does not predetermine the final result.
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