Trade court tests tariffs

On Friday, a three-judge panel at the United States Court of International Trade pressed government lawyers on why President Donald Trump could put a 10% tariff on most imports after the Supreme Court had already blocked his earlier, broader tariff plan in February. The case is not about whether tariffs are good policy; it is about whether this particular law actually lets a president do it. (apnews.com) (congress.gov) The court hearing happened because 24 mostly Democratic-led states and two small businesses sued to stop the tariff that took effect on February 24, 2026. They say Trump switched legal tools after losing at the Supreme Court and tried to keep a global import tax alive through a narrower door. (reuters.com) (apnews.com) The new tool is Section 122 of the Trade Act of 1974, a law that lets a president put a temporary surcharge of up to 15% on imports for up to 150 days. Congress wrote it for a “large and serious” United States balance-of-payments deficit, which is a problem with money flowing out of the country in international transactions. (pbs.org) (axios.com) (nbcnews.com) That phrase became the whole fight in court. Judges asked whether America’s modern trade gap is the same thing as the older “balance-of-payments” problem Congress had in mind in 1974, and lawyers on both sides spent hours arguing over a term that sounds technical but decides whether the tariff stands or falls. (axios.com) (reuters.com) This case exists because of a different court loss on February 20, 2026. In that ruling, the Supreme Court said the International Emergency Economic Powers Act does not give a president authority to impose tariffs, which wiped out the legal foundation for Trump’s earlier emergency-based tariff program. (congress.gov) (nbcnews.com) So the administration changed lanes fast. After the Supreme Court ruling, Trump terminated the emergency tariffs and replaced them with the 10% Section 122 tariff, which is smaller than the old plan but still broad enough to hit goods coming into the United States from around the world. (nbcnews.com) (cov.com) The calendar matters almost as much as the legal theory. Section 122 only allows the tariff for 150 days without Congress, which means this round is scheduled to expire on July 24, 2026, unless lawmakers step in or the administration finds another path. (pbs.org) (nbcnews.com) The judges did not rule from the bench on April 10, and one report said the panel sounded skeptical of the challengers while another emphasized tough questions for the government. That usually means the real signal is not a courtroom sound bite but the written opinion that comes later. (abcnews.com) (reuters.com) For importers, builders, and manufacturers, the problem is not just the 10% itself. It is that prices for steel, machinery, fixtures, and other inputs can change while courts, Congress, and the White House are all still fighting over which tariff law survives. (reuters.com) (apnews.com) What looked in February like a replacement tariff is now turning into a test of how much trade power Congress handed the presidency half a century ago. If the court says Section 122 does not fit today’s trade deficit, Trump loses another shortcut and the next tariff fight moves back to Congress or to a different statute. (pbs.org) (congress.gov)