U.S. trade tariff faces court test

A 10% tax on almost everything entering the United States took effect on February 24, and on April 10 the United States Court of International Trade heard arguments over whether the White House had legal authority to do it. The case was brought by 24 states and two small businesses, so import costs are now being fought over in court as well as in contracts and shipping plans. (usnews.com, cit.uscourts.gov) This tariff is not the same policy the Supreme Court knocked down earlier in 2026. After that loss, the administration switched to Section 122 of the Trade Act of 1974, a different law that lets a president impose a temporary import surcharge. (reuters.com, whitehouse.gov) Section 122 is a narrow tool with two hard numbers built into it. The law allows a tariff of up to 15% and says it can last only 150 days unless Congress extends it. (law.cornell.edu, federalregister.gov) The administration says the United States has “fundamental international payments problems,” which is the condition Section 122 was written for. In its February 2026 proclamation, the White House tied the new duty to trade imbalances and the position of the dollar in global markets. (whitehouse.gov, federalregister.gov) The states and businesses say that explanation does not fit what Section 122 was meant to cover. Their argument is that the president is using a temporary balance-of-payments law as a backup route to restore a broad tariff policy the Supreme Court had already cut back. (reuters.com, politico.com) The two business plaintiffs are not giant multinationals with teams of customs lawyers. They are Burlap and Barrel, a spice company, and Basic Fun, a toy company, and both say a flat global duty hits ordinary inventory in ways that are hard to reroute quickly. (supplychaindive.com, reuters.com) Customs and Border Protection told importers on February 23 that the extra duty would apply to imported articles from every country unless an exemption applied. That turned a legal theory in Washington into an immediate line item on invoices, customs entries, and pricing decisions. (govdelivery.com, federalregister.gov) The short-term business problem is simple: a tariff that lasts 150 days can still scramble a whole season of orders. A toy importer planning for back-to-school or a food company buying spices months ahead still has to decide now whether to absorb the duty, raise prices, or delay shipments. (law.cornell.edu, supplychaindive.com) The longer-term issue is whether courts let presidents treat Section 122 as a ready-made replacement when broader tariff powers fail. If the trade court rejects this move, the administration loses not just a 10% duty but a fast workaround after the Supreme Court’s earlier ruling. (reuters.com, thomsonreuters.com) That is why this hearing is bigger than one tariff rate. It will help decide whether future import planning in the United States is mostly a question of freight costs and factory contracts, or whether every big tariff now also comes with a second calculation about how long it survives in court. (reuters.com, hartfordbusiness.com)