Tariff legality in question

A three-judge panel in New York spent Friday asking a blunt question: what law, exactly, lets President Donald Trump keep a 10% tariff on imports from nearly every country after the Supreme Court already blocked his first tariff theory in February. The judges on the U.S. Court of International Trade sounded doubtful that a trade deficit by itself is enough. (reuters.com) (congress.gov) Trump announced the 10% baseline tariff on April 2, 2025, and U.S. Customs began collecting it on April 5, 2025. That tax sits on top of many existing duties, so an imported server, graphics card, or networking switch can arrive with multiple layers of charges. (kpmg.com) (cnbc.com) A tariff is just a tax at the border, but the legal fight turns on who is allowed to create that tax. The Constitution gives Congress the power to set tariffs, so presidents usually need a specific statute from Congress before they can raise them. (congress.gov) (sidley.com) Trump’s first route was the International Emergency Economic Powers Act, a 1977 law built for sanctions and other emergency economic controls. On February 20, 2026, the Supreme Court ruled 6-3 that this law does not authorize tariffs, which knocked out the broader tariff program he had tried to build under an emergency declaration. (congress.gov) (ropesgray.com) After that loss, the administration shifted to Section 122 of the Trade Act of 1974. That law lets a president respond to large balance-of-payments problems, but only with temporary measures, including a tariff of up to 15% for no more than 150 days. (nbcnews.com) (reason.com) The problem for the White House is that “balance of payments” is not the same thing as “America buys more goods than it sells.” Judges pressed government lawyers on Friday over whether the United States actually has the kind of international payments crisis Section 122 was written for, and reporting from the hearing said no one offered a clean definition that satisfied the court. (axios.com) (reuters.com) The challengers are not just rival politicians. The case was brought by 24 mostly Democratic-led states and a group of small businesses that say the administration is trying to sidestep the Supreme Court by swapping one legal label for another while keeping the same tax. (apnews.com) (politico.com) That legal uncertainty shows up fastest in hardware buying because hardware orders are priced before delivery and cleared through customs after shipment. If a buyer signs for 1,000 laptops or a rack of data-center gear and the tariff changes while the goods are in transit, the landed cost can jump after the deal is already on paper. The tariff itself is a fixed 10%, but the business risk is the possibility that the court kills it, preserves it, or forces another rewrite. (reuters.com) (thomsonreuters.com) That is why importers hesitate even when they can afford the tax. A company buying semiconductors, monitors, or industrial controllers has to decide whether to order now and risk overpaying, or wait and risk shortages, new rules, or a court decision that arrives after competitors already locked in supply. (reuters.com) (msn.com) The court has not ruled yet, so the 10% tariff remains in place for now. What Friday’s hearing made clear is that this is no longer just a fight over trade policy; it is a fight over whether the president found a lawful spare key after the Supreme Court took away the front door. (reuters.com) (nbcnews.com)