The US Court of International Trade has ruled against President Donald Trump's latest 10% global tariffs, marking a significant legal setback for one of his key trade policies. The decision raises questions about the administration's authority to impose broad import duties without congressional approval.
Court Ruling Details
In a 2–1 decision on Thursday, the court found that the tariffs imposed earlier this year were not justified under the Trade Act of 1974 and were therefore 'invalid' and 'unauthorized by law,' according to Reuters. Trump had announced the 10% global tariffs in February via executive order, applying them broadly across imports. These measures followed a US Supreme Court ruling that struck down earlier, more aggressive tariff actions, stating they exceeded presidential authority under emergency economic powers.
Legal Basis Challenged
The administration had invoked Section 122 of the Trade Act of 1974, which permits temporary tariffs for up to 150 days in cases of serious balance of payments deficits or risks to currency stability. Officials argued that the US faced a major trade imbalance, citing a $1.2 trillion goods trade deficit and a current account deficit of about 4% of GDP. However, the court rejected this justification, ruling that the cited trade deficit did not meet the legal threshold required under the law. The majority judges concluded that the government had overstepped its authority granted by Congress.
Plaintiffs and Impact
The case was brought by small businesses reliant on global supply chains, who argued that the tariffs were designed to bypass the earlier Supreme Court ruling. Jay Foreman, CEO of toy manufacturer Basic Fun, praised the decision: 'This decision is an important win for American companies that rely on global manufacturing to deliver safe and affordable products. Unlawful tariffs make it harder for businesses like ours to compete and grow.' He added that the ruling provides clarity for companies managing international supply chains, which had been under pressure since the tariffs were introduced.
Dissent and Appeal
One judge on the three-member panel dissented, arguing that the law provides broader discretion to the president on trade matters and that the challenge was premature. The ruling is expected to be appealed. If pursued, the case will go to the US Court of Appeals for the Federal Circuit in Washington and could eventually reach the Supreme Court again.
Broader Context
This decision adds to a series of legal challenges against Trump's tariff strategy. In February, the Supreme Court struck down earlier versions of his global tariffs, ruling that emergency economic powers do not grant unlimited authority to impose import taxes. The ruling underscores ongoing tensions between executive trade actions and legislative oversight.
