The ruling came just days after a lower court declared the 10 percent global tariff unlawful.
The U.S. Court of Appeals for the Federal Circuit issued the administrative stay Tuesday, according to Reuters and U.S. court filings.
The order pauses a May 7 ruling by the U.S. Court of International Trade, which found the blanket 10 percent tariff unlawful under Section 122 of the Trade Act of 1974 — the statute the White House invoked after the Supreme Court struck down its earlier reciprocal tariffs in February.
The stay keeps the tariff in place while the appeals court considers whether to grant a longer pause. The Trump administration must file briefs supporting the stay within days, while the small businesses and state plaintiffs that won the lower court ruling must respond within a week, according to court filings reviewed by Bloomberg.
The decision comes as the Lee Jae Myung administration finalizes the first investment project under the bilateral deal that lowered South Korea’s tariff rate from 25 percent to 15 percent last year.
South Korea negotiated the tariff reduction during the October 2025 summit in Gyeongju.
In exchange, Seoul committed to a $350 billion investment package over 10 years, including $200 billion in cash installments and $150 billion under the “Make American Shipbuilding Great Again,” or MASGA, framework, with an annual ceiling of $20 billion.
Seoul also pledged to purchase $100 billion worth of U.S. oil, LNG and LPG over four years. The National Interest noted in March that the commitment amounted to only about $6.8 billion in incremental purchases above existing trade flows.
The lower court ruling, now paused by the appeals court, does not directly affect Korean imports. Relief was granted only to the named plaintiffs — two U.S. small businesses and the state of Washington — rather than through a nationwide injunction.
Korean exporters, like other foreign entities, generally cannot file suit in U.S. trade court.
Industry Minister Kim Jung-kwan returned to Seoul on Saturday after a four-day trip to Washington, during which he met U.S. Commerce Secretary Howard Lutnick to discuss specific projects under the bilateral investment framework, the Industry Ministry said. The first formal project under the deal has yet to be announced.
The deeper concern in Seoul is what happens after July.
Under the law, Section 122 tariffs are limited to 150 days and are set to expire in late July. The Trump administration has signaled that it intends to replace them with tariffs imposed under Section 301 of the Trade Act, which allows duties to be levied following investigations into trade practices and imposes no statutory ceiling on tariff rates.
According to CNBC, the U.S. Trade Representative has launched Section 301 investigations into 16 trading partners, including South Korea, over concerns related to overcapacity and forced labor.
Korean industries most exposed to the 10 percent global tariff include automotive, steel and batteries.
Hyundai Motor Group and Kia, both heavily reliant on U.S. sales, have faced mounting cost pressure since the tariff took effect, according to Korean trade publications. Korean steelmakers, already operating under quota and product-specific tariff restrictions, face additional strain, while battery manufacturers have seen input costs rise sharply under U.S. supply-chain restructuring policies.
If the 10 percent global tariff is ultimately struck down, Korean exporters could become eligible for refunds.
The U.S. government is currently processing about $166 billion in refunds tied to the earlier reciprocal tariffs invalidated by the Supreme Court in February under the International Emergency Economic Powers Act, according to a customs official’s filing reviewed by Transport Topics. Roughly $35.5 billion in claims have been filed through an online portal launched in late April.
For Korean firms, however, the key question is whether the legal momentum will translate into meaningful relief. The Trump administration has consistently moved to substitute one tariff authority for another when blocked, while Korea’s negotiated 15 percent reciprocal tariff rate exists outside the Section 122 framework now under review.
The U.S.-Korea Strategic Investment Special Act, which provides the legal basis for the projects tied to $350 billion investment package, was passed by the National Assembly on March 12 and will take effect next month.
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