Following the latest court ruling that deemed the Trump administration’s tariff policy as “overstepping,” the government has requested a stay on the decision to allow for an appeal.
According to a report by CCTV, the International Trade Court ruled against the new tariff measures on May 8, but did not completely halt the collection of tariffs. The Trump administration officially filed an appeal on the same day. If the court approves the stay, importers who previously sued the government over the tariff policy will once again face a 10% global tariff.
The judge at the time believed that the clause cited by the White House only applied to “correcting international payment imbalances,” not simply trade deficits.
On February 20, the US Supreme Court ruled that the Trump administration’s massive tariff measures, implemented under the International Emergency Economic Powers Act, lacked clear legal authorization. The 9 justices upheld the lower court’s ruling by a 6-3 vote, determining that Trump’s actions exceeded his statutory authority.
On the same day the Supreme Court made its ruling, Trump declared the imposition of “global import tariffs” at a rate of 10% for 150 days, citing Section 122 of the 1974 Trade Act. The next day, he threatened to raise the tariff rate to 15%. The global tariff measure is set to expire in July this year, unless Congress decides to extend it.
Unlike the International Emergency Economic Powers Act, which does not explicitly grant the president the power to use “tariff tools,” Section 122 of the Trade Act authorizes the president to impose tariffs of up to 15% to address international payment imbalances. Trump believes that the US trade deficit and the risk of a significant devaluation of the dollar meet the requirements of the law.
Based on Trump’s and Treasury Secretary Bensen’s tough stance, the White House’s top priority is to introduce alternative tariff tools to make up for the lost revenue, such as Section 232 of the 1962 Trade Expansion Act and Section 122.
A statement from the White House at the time said that, out of economic necessity or to ensure that the tariffs can more effectively address the fundamental international payment problems faced by the US, certain goods will be exempt from the temporary import tariffs.
These include: certain key minerals, metals used for currency and gold and silver bars, energy and energy products; natural resources and fertilizers that cannot be grown, mined, or produced in the US, or cannot be grown, mined, or produced in sufficient quantities to meet domestic demand; certain agricultural products, including beef, tomatoes, and oranges; pharmaceuticals and pharmaceutical ingredients; certain electronic products; passenger cars, certain light trucks, certain medium and heavy trucks, buses, and certain parts for passenger cars, light trucks, heavy trucks, and buses; and certain aerospace products, as well as information materials (such as books), donated items, and personal luggage.
In addition, certain goods are exempt from the temporary import tariffs, including all goods currently or in the future subject to Section 232, as well as goods from Canada and Mexico that comply with the US-Mexico-Canada Agreement (USMCA), and textiles and clothing from Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua that are exempt from tariffs under the Dominican Republic-Central America Free Trade Agreement.
In another executive order, Trump reiterated and continued to suspend the duty-free treatment for low-value goods (including goods transported through the international postal system), which will also be subject to the temporary import tariffs under Section 122. In addition to the measures taken that day, Trump also instructed the US Trade Representative to use its authority under Section 301 to investigate certain unreasonable and discriminatory practices, policies, and actions.
As previously planned, the federal government’s customs agency officially launched the tariff refund system on April 20 at 8 pm Beijing time, which will refund $166 billion (approximately RMB 1.13 trillion) in tariffs to 330,000 importers. The first batch of refunds was issued on May 12.
The system, called “CAPE,” was launched by US Customs and Border Protection and will be implemented in stages through electronic transfers. Applicants must be registered importers with US Customs. Enterprises need to register and submit declarations on their own. Refunds will also be accompanied by interest (approximately 6%) calculated on a monthly basis.
This largest-ever tariff refund in human history will undoubtedly have a profound impact on the global trade landscape and the operation of US enterprises.
For the US itself, the refund will directly improve corporate cash flow, particularly benefiting large retailers and tech companies such as Apple, Costco, Target, and Walmart. Some of the funds may be used for stock buybacks, dividends, or expanded production, boosting consumption and employment.
The US trade measures, which are changing rapidly, will once again impact the US economy and the direction of global trade.
Think tank Atlantic Council’s president of international economics, Lipsky, said that this once again reminds us that the market’s previous judgment that 2026 would be a year of tariff stability was incorrect.
Huaxi Securities pointed out that the decrease in tariff levels will bring about an export window period, which is beneficial to the warming of global trade: China’s direct exports to the US will see a 10% decrease in tariffs, and the export costs of Southeast Asian countries to the US will also decrease by around 5% (if the 122 tariff is raised to 15%). At the same time, future tariff uncertainties may bring about a new round of export rushes.
