Trump's 10% Tariff Violated Law, Trade Court Rules

A federal trade court ruled Thursday that President Trump exceeded his authority when he ordered a 10% tariff on most US imports, marking another legal defeat for his trade agenda. The Court of International Trade concluded that Trump improperly relied on a little-used section of the Trade Act of 1974 to justify the levies, which took effect in February after an earlier set of tariffs had been struck down by the Supreme Court. The panel said, in a 2-1 decision, that the legal conditions required to invoke that emergency power—including the existence of major balance-of-payments problems—had not been met, the New York Times reports.

The ruling effectively curbs, at least for now, Trump's ability to impose broad tariffs without congressional approval, a tool he had used to pressure allies and rivals alike, boost federal revenue, and push for more US-based production. The administration had framed the across-the-board tariff as a stopgap measure while officials worked on a more durable trade policy using other statutes. Those provisions are not ready yet, per the Times. The ruling could hurt Trump's leverage in negotiations next week with Chinese leader Xi Jinping.

The government is expected to appeal. If the ruling stands, the administration would have to reimburse importers for duties collected under the 10% tariff, echoing the ongoing refund process for roughly $166 billion brought in under Trump's earlier tariffs that were invalidated by the Supreme Court. Those policies, and the subsequent lawsuit filed by states and small businesses, have tested how far a president can go in using trade law written in the gold-standard era to address today's economic and political disputes. Thursday's ruling was a victory for the small businesses; one judge found the plaintiffs' win premature, per Reuters.