A recent decision by the U.S. Court of International Trade has found President Donald Trump’s 10% global tariffs imposed in February incompatible with a statute from the 1970s, although relief was granted only to two private companies and Washington State. The court’s split decision leaves most importers still subject to the duties, but it establishes a precedent that other firms could use in future legal challenges.
The ruling evaluated the administration’s use of Section 122 of the Trade Act of 1974, which authorizes temporary import surcharges in the case of critical U.S. balance-of-payments issues. The majority concluded that invoking this law to justify broad, global tariffs was improper.
However, the Trade Court has decided not to grant a broad injunction against the Section 122 tariffs, denying a request from a coalition of 24 states led primarily by Democrats. The court found that, except for the State of Washington, these states lacked the necessary legal standing, as they were not shown to be subject to or impacted by the tariffs.
While the specific tariffs addressed are set to expire within two months, the verdict represents another legal setback for Trump’s international tariff initiatives. The judgment comes shortly before planned trade discussions in Beijing between President Trump and Chinese President Xi Jinping.
The legal process may continue, as any appeal would move to the U.S. Court of Appeals for the Federal Circuit, which has previously ruled against other tariffs set by Trump under emergency provisions. The latest court action also sets up a new round of disputes over potential refunds on billions in paid tariffs, following the Supreme Court’s rejection of the broader tariffs.
Trump’s efforts to adapt an older statute to support sweeping tariffs have faced consistent opposition, with critics arguing that the 1974 law was not meant for such purposes. In court hearings, judges expressed doubts that the present tariff policy could be justified by the cited balance-of-payments statute.
Despite successive legal defeats, administration officials plan to pursue future tariffs by drawing on Section 301 of the Trade Act of 1974, which addresses unfair trade practices and has previously survived court scrutiny. Three investigations under this law are expected to conclude in July.
