Trade court weighs tariffs

A three-judge trade court in New York is weighing whether President Donald Trump’s 10% tariff on most imports can stay in place. (reuters.com) The U.S. Court of International Trade heard arguments on Friday, April 10, in lawsuits filed by 24 mostly Democratic-led states and two small businesses. The tariff took effect on February 24 after Trump announced it four days earlier. (reuters.com) The new levy rests on Section 122 of the Trade Act of 1974, a law that lets a president impose tariffs of up to 15% for 150 days to address international payments problems. Trump set the rate at 10%, and the measure is scheduled to expire on July 24 unless Congress extends it. (nbcnews.com) This case landed in court because the Supreme Court struck down many of Trump’s broader tariffs on February 20 after he had relied on the 1977 International Emergency Economic Powers Act. The administration then shifted to Section 122, which is narrower and temporary. (nbcnews.com) The fight now turns on an old phrase in the 1974 law: “international payments problems.” Government lawyers say persistent U.S. trade deficits fit that language, while the states and businesses say the statute was written for currency crises from the gold-standard era, not modern trade gaps. (nbcnews.com) Judges pressed the administration on that point during Friday’s hearing, with questions that suggested a large trade deficit alone may not justify a worldwide tariff. Reuters reported that the panel challenged whether the White House had identified a sufficient legal basis for such a broad import tax. (reuters.com) The challengers also argue the administration is trying to do indirectly what courts already blocked directly. They say the February order sidesteps the Supreme Court’s limits on using emergency powers for tariffs by moving the policy to a different statute. (reuters.com) The legal backdrop is unusually tangled because the same trade court and the appeals court have already spent months on Trump’s earlier tariff cases. In 2025, the Court of International Trade entered judgment against the government and permanently enjoined several tariff orders, and the appeals that followed were consolidated at the United States Court of Appeals for the Federal Circuit. (cit.uscourts.gov) That earlier appeals case also shows who has been driving the challenges: small import-reliant companies and a coalition of states led by Oregon, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, and Vermont. Those same kinds of plaintiffs are now back in court over the 10% tariff. (cafc.uscourts.gov) The administration says the tariff is a lawful response to chronic trade imbalances and not a challenge to more traditional tariff tools such as duties on steel, aluminum, and copper imposed under other statutes. The court did not rule from the bench on Friday, leaving importers, retailers, and manufacturers waiting to see whether the 10% charge survives past the spring. (reuters.com)