US court strikes down 10% tariffs

Tariffs are back in court again — and this time the fight is over Trump’s 10% global duty, not the broader emergency tariffs that already got knocked down earlier this year. On May 7, the U.S. Court of International Trade ruled 2-1 that the administration could not use Section 122 of the Trade Act of 1974 to justify that across-the-board tariff. But the judges stopped short of wiping it out for everyone. They blocked it only for Washington state and two private importers, which means the policy is weakened, not dead. ### What exactly did the court strike down? The court targeted the 10% temporary tariff Trump announced on February 20, 2026 under Section 122 — a narrower trade statute that lets a president respond to balance-of-payments problems. The administration had turned to that law after its bigger reciprocal-tariff strategy ran into legal trouble. The judges said that move went too far. (cit.uscourts.gov) ### Why did Section 122 fail? Basically, Section 122 is not a blank check for “the trade deficit is too big.” The court said that law is meant for a specific kind of emergency — a large and serious balance-of-payments problem. That is a much tighter standard than general complaints about unfair trade or bilateral imbalances. One judge dissented in part on the remedy question, but the majority said the legal basis itself did not fit. (economictimes.indiatimes.com) ### Why wasn’t the tariff blocked for everyone? Because remedies matter as much as merits. The trade court declined to issue a universal injunction. It said the private plaintiffs had shown harm to themselves, not to every importer in America, and that the multistate group did not have standing to win nationwide relief on behalf of everyone else. So the ruling is real, but narrow. (economictimes.indiatimes.com) ### Who actually benefits right now? Immediately, Washington state and the two successful importer plaintiffs do. Everyone else stays in limbo unless they bring their own cases, join broader litigation, or win relief later on appeal. That is why the decision feels bigger than its direct effect — it hands other importers a legal roadmap even if it does not yet hand them a refund. (economictimes.indiatimes.com) ### Why does India care? Because this tariff had applied to all trading partners, including India. If that 10% layer falls away more broadly, U.S. duties on Indian goods would drop back toward normal MFN levels unless another tariff tool replaces it. That gives New Delhi a stronger hand in bilateral trade talks — not because the U.S. suddenly became easy, but because one more U.S. pressure lever looks legally shaky. (economictimes.indiatimes.com) ### So is the tariff policy collapsing? Not exactly. The catch is that trade policy now looks less powerful and more chaotic at the same time. Reuters noted the tariffs are expected to expire in July anyway, and an appeal is likely. Separate USTR Section 301 investigations launched in March 2026 are still hanging over countries including India. So one legal route got narrower, but other routes are still open. (thehindubusinessline.com) ### What does this mean for companies? It means planning gets harder. Importers cannot assume the tariff disappears for everyone, and they cannot assume it survives either. Businesses now have to model both outcomes — refunds, new cases, appeal risk, and the possibility that the White House shifts to another statute. That is messy, but it is also the real takeaway. (economictimes.indiatimes.com) ### Bottom line The court did not end Trump’s tariff push. It did something almost as important — it said one of the administration’s backup legal theories does not hold up, while leaving the commercial mess in place for now. (economictimes.indiatimes.com)