Tariff uncertainty looms

A court in New York is hearing a case on April 10 over the Trump administration’s 10% tariff on nearly all imports, and the argument is not about steel or cars but about whether the president can put a blanket tax on global trade without Congress. The tariff took effect on February 24 under Section 122 of the Trade Act of 1974, and 24 states plus two small businesses want it blocked. (usnews.com) Section 122 is a narrow emergency tool that allows tariffs of up to 15% for up to 150 days during a “large and serious” balance-of-payments problem or a looming dollar crisis. The administration says the United States buys more goods than it sells, so the 10% tariff fits that law. (usnews.com) The states suing say a normal trade deficit is not the same thing as the kind of currency emergency Congress had in mind in 1974. They also point out that the new tariff was announced on February 20, the same day the Supreme Court struck down a broad set of earlier Trump tariffs imposed under the International Emergency Economic Powers Act, the law usually used for sanctions. (usnews.com) That February 20 ruling forced the White House to swap legal engines mid-drive. A White House order ended the old International Emergency Economic Powers Act tariffs “as soon as practicable,” and a separate move replaced them with the 10% global tariff starting February 24 for 150 days, which runs to July 24. (whitehouse.gov) (internationaltradeinsights.com) Now the administration is testing an even sharper idea: a 50% tariff on goods from any country that supplies military weapons to Iran. President Trump announced that threat on April 8, but advisers have been sending mixed signals about how to make it legal after the Supreme Court already rejected the broad tariff use of the International Emergency Economic Powers Act in February. (politico.com) (finance.yahoo.com) That is why this story feels bigger than one court hearing. The White House is arguing in court that it can keep a 10% tariff on the whole world under one statute while also hinting it may punish countries tied to Iran under a different emergency theory that the Supreme Court just narrowed. (usnews.com) (politico.com) Businesses do not need to know the legal citations to feel the effect. They just need to know whether a shipment arriving next month will face 0%, 10%, 25%, 50%, or a refund fight later, and that kind of uncertainty changes orders, prices, and inventory long before a judge rules. (internationaltradeinsights.com) (thompsonhinesmartrade.com))) A year into the tariff push, the trade map already looks different. Royal Bank of Canada says the overall U.S. goods and services trade deficit widened by $8 billion in 2025, the goods deficit hit a record $1.23 trillion, and imports shifted away from China toward Vietnam, Thailand, India, Malaysia, Mexico, and Taiwan instead of disappearing. (rbc.com) China’s share of U.S. goods imports fell to 9% in 2025 from just over 13% in 2024, while the U.S.-China goods deficit dropped by almost one-third to $202 billion. But Vietnam’s deficit with the United States widened to $178.2 billion, Mexico’s grew to $196 billion, and Taiwan’s nearly doubled to $146.8 billion, which looks less like trade disappearing and more like trade changing airports. (rbc.com) Consumers meet that uncertainty at the menu board. S&P Global says prices for food away from home rose 4% from January 2025 to January 2026, and the National Restaurant Association says 2026 sales may reach $1.55 trillion but real growth is only about 1.3% because cautious households are still pulling back even as operators keep raising prices. (spglobal.com) (restaurant.org) So the court fight is not just about whether one 10% tariff survives. It is about whether the administration can keep using emergency-style trade powers after the Supreme Court’s February 20 warning, and whether businesses and consumers should brace for another round of price changes before the first one has even settled. (usnews.com) (politico.com)