Tariff plan faces court challenge
A legal challenge landed at the U.S. Court of International Trade over the administration’s 10% global tariff, with states and businesses arguing it sidesteps prior Supreme Court limits. The suit matters because tariffs feed into inflation expectations and corporate pass‑through—so its legal outcome could shift pricing and sector winners if judges curb the policy ( ).
A court in lower Manhattan spent Friday asking a basic question with trillion-dollar consequences: can a president put a 10% tax on nearly every import just by declaring a trade problem, or does Congress have to say yes first. The case is in the United States Court of International Trade, the specialized federal court that handles customs and trade fights. (reuters.com; cit.uscourts.gov) The tariff at issue took effect on February 24, 2026, and it applies a 10% import tax across the board. Twenty-four mostly Democratic-led states and two small businesses sued to stop it. (reuters.com; cbsnews.com) The administration is not defending this tariff under the same emergency law it leaned on before. This time it says Section 122 of the Trade Act of 1974 lets the president impose a surcharge of up to 15% for up to 150 days to respond to a “large and serious” balance-of-payments deficit. (pbs.org; nationaltoday.com) A balance-of-payments deficit sounds abstract, but it is just a countrywide ledger. More money is flowing out to pay for imports, investment, and other claims than is flowing in. (pbs.org; nationaltoday.com) The states and businesses say that law was written for a very specific kind of currency-and-payments stress, not for a modern White House trying to raise a universal border tax. Their complaint says the United States does not face the kind of payments crisis Congress had in mind in 1974. (cbsnews.com; nationaltoday.com) That argument lands differently because of what happened in February. The Supreme Court had already knocked out most of Trump’s earlier tariffs after finding his use of the International Emergency Economic Powers Act went too far, so this new 10% plan looks to challengers like a second route to the same destination. (reuters.com; thehill.com) The trade court has been flooded enough by tariff litigation that it issued a 2025 administrative order creating procedures for new cases over import duties imposed under the International Emergency Economic Powers Act. That does not decide this Section 122 case, but it shows how central tariff power has become to the courts. (cit.uscourts.gov; cit.uscourts.gov) For companies, a 10% tariff is not a line in a law book. It is a new cost on every container that reaches a U.S. port, and businesses then have to choose between eating that cost, raising prices, or squeezing suppliers. (apnews.com; reuters.com) That is why the plaintiffs include states as well as importers. States buy goods for schools, roads, hospitals, and public agencies, so a tariff that lifts input prices can hit state budgets before voters ever see the receipt. (cbsnews.com; apnews.com) If the judges say Section 122 does cover this kind of broad tariff, the White House keeps a fast tool that lasts 150 days and reaches 15%. If the judges say no, the ruling could narrow how much trade policy any president can make alone without a fresh vote from Congress. (pbs.org; reuters.com)
