A federal appeals court on May 12 temporarily put on hold a lower court ruling striking down the Trump administration's global tariffs.
The federal government promptly filed an appeal with the U.S. Court of Appeals for the Federal Circuit and asked the appeals court to block the ruling.
An administrative stay puts a lower court ruling on hold while the appeals court takes time to consider the case.
The Federal Circuit said in its order that it is considering granting a longer stay. It directed the plaintiffs in the original lawsuit to respond to the federal government’s request to extend the stay within seven days.
In his February order imposing the tariffs, Trump relied on Section 122 of the Trade Act, which permits duties to be imposed for as many as 150 days to remedy serious “balance of payments deficits” or combat an imminent depreciation of the U.S. dollar.
The federal government had argued that there was a significant balance-of-payments deficit in the form of a $1.2 trillion annual U.S. goods trade deficit, along with a current account deficit of 4 percent of the gross domestic product.
The trade court’s majority held that Trump had gone beyond what the statute allowed. It found that the tariffs were “invalid” and “unauthorized by law.”
The majority found that Section 122 was not intended to remedy trade deficits that take place when U.S. imports exceed exports.
In addition to finding the tariffs were unlawful, the trade court issued a permanent injunction preventing the government from collecting the duties from Washington state and from two companies that brought suit over the policy.
Although more than 20 states sued, the court found all but Washington lacked standing, or a close enough connection to the controversy, to justify participating in the case. The court ruled two businesses, toy company Basic Fun, and spice importer Burlap and Barrel, had standing.
Other companies may sue to seek relief from the tariffs, citing the trade court’s ruling in the case.