Court weighs 10% tariff legality
The U.S. Court of International Trade is weighing challenges to the legality of the administration’s 10% global import tariff, with states and small businesses arguing it sidesteps prior Supreme Court limits on tariff authority. (ctvnews.ca) That legal uncertainty is creating a planning problem for firms that need to show boards how sourcing and pricing decisions will hold up if the rule changes. (ctvnews.ca)
A federal trade court in New York is weighing whether President Donald Trump’s 10% tariff on most imports can stay in place. (apnews.com) The U.S. Court of International Trade heard arguments on Friday, April 10, over tariffs Trump imposed on February 24 after the Supreme Court struck down his earlier import taxes in February. (reuters.com) The new tariff rests on Section 122 of the Trade Act of 1974, a law that lets a president impose an import surcharge of up to 15% for 150 days to address a “balance-of-payments” problem, a gap between money flowing out of the country and money coming in. (law.cornell.edu) That matters because the statute is narrower than the emergency law Trump used before. On February 20, the Supreme Court ruled 6-3 in *Learning Resources, Inc. v. Trump* that the International Emergency Economic Powers Act does not authorize tariffs. (supremecourt.gov) The challengers are 24 mostly Democratic-led states and two small businesses. They argue Section 122 was written for a currency and payments crisis that does not fit today’s trade deficit, and they say Congress, not the White House, sets tariff policy. (bloomberg.com) Judges on the three-member panel pressed government lawyers on that point during more than three hours of argument, asking whether a large trade deficit alone is enough to trigger the law. (reuters.com) The administration says Section 122 gives the president temporary power to act when international payments problems threaten the economy. In its February 25 notice, the White House said the surcharge was needed to address “fundamental international payments problems.” (federalregister.gov) Section 122 also comes with a built-in clock. Unless Congress extends it, the 10% surcharge expires 150 days after February 24, which puts the deadline on July 24, 2026. (everycrsreport.com) That short fuse is part of the business problem. Importers are deciding now whether to raise prices, shift suppliers, or wait for a ruling on a tariff that could be struck down by the court or expire by statute in a little more than three months. (ctvnews.ca) The same court moved quickly after the February Supreme Court ruling, and Oregon Attorney General Dan Rayfield, who is leading the state coalition, said after Friday’s hearing that the focus should be on refunds and on restoring Congress’s role in setting tariffs. (opb.org)
