A US trade court on Thursday delivered another legal setback to President Donald Trump’s tariff agenda, ruling that his latest 10-percent global import duty was not authorized under the law the administration used to impose it.
In a 2-1 decision, the US Court of International Trade found that the across-the-board tariff, introduced under Section 122 of the Trade Act of 1974, did not meet the statute’s requirements. The provision allows temporary import surcharges of up to 15 percent for as long as 150 days when the United States faces serious balance-of-payments problems or related currency pressures. The court concluded that the administration’s reliance on the US trade deficit did not satisfy that standard.
The ruling is narrow. For now, it blocks tariff collection only for the plaintiffs in the case, including spice importer Burlap & Barrel, toy company Basic Fun!, and the State of Washington. The court declined to issue a broader nationwide injunction, meaning most importers may not receive immediate relief while the litigation continues. The judges ordered the government to implement the ruling within five days and issue refunds to the successful plaintiffs. The Trump administration is expected to appeal, a move that could keep the legal fight alive and potentially send the dispute back toward the Supreme Court.
Trump imposed the temporary 10-percent duty in February after the Supreme Court struck down many of his earlier global tariffs imposed under the International Emergency Economic Powers Act. The Section 122 tariff was scheduled to expire in late July unless extended by Congress.
Thursday’s decision adds uncertainty for businesses already struggling with shifting trade rules, refund claims and import costs. US Customs and Border Protection previously estimated that hundreds of thousands of importers could be eligible for refunds tied to the earlier Supreme Court ruling, which affected duties collected under Trump’s emergency-powers tariff program. The decision does not affect Trump’s sector-specific tariffs on goods such as steel, aluminum and automobiles, which were imposed under separate legal authorities. However, it further limits the administration’s ability to rely on broad emergency-style powers to apply sweeping tariffs without Congress.
Trump officials have already opened new trade investigations into foreign forced labor, industrial overcapacity and unfair trade practices, potentially laying the groundwork for fresh duties under other statutes. For now, the ruling underscores a central challenge for the White House: rebuilding an aggressive trade agenda while navigating courts increasingly skeptical of expansive presidential tariff power.
