Court hears 10% tariff fight
A U.S. trade court heard arguments over the administration’s new 10% global tariff, with states and small businesses saying the White House is trying to sidestep a prior Supreme Court rebuke and the administration defending its presidential trade powers. The legal fight matters because it will determine whether the tariff program survives judicial scrutiny and how far the executive branch can use tariffs as a standing policy tool amid rising political and economic pressure. (reuters.com) (nytimes.com)
On Friday, April 10, a three-judge panel at the United States Court of International Trade heard a challenge to the administration’s new 10 percent tariff on many imports from nearly every country, a tax that started on February 24. The plaintiffs are 24 mostly Democratic-led states and two small businesses that want the court to shut it down. (reuters.com) (nytimes.com) This fight exists because the Supreme Court already ruled on February 20, 2026, that the International Emergency Economic Powers Act of 1977 does not let a president impose tariffs. Chief Justice John Roberts wrote that decision in the paired cases Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, Inc. (congress.gov) (sidley.com) After losing that case, the administration switched laws. Instead of using the emergency-powers statute, it used Section 122 of the Trade Act of 1974, a narrower law that lets a president respond to a large balance-of-payments problem with temporary import restrictions. (nytimes.com) (supplychaindive.com) Section 122 is not a blank check. The law caps tariffs at 15 percent and limits them to 150 days unless Congress acts, which is why the administration’s replacement tariff landed at 10 percent instead of the broader rates it had tried before. (supplychaindive.com) (nytimes.com) The states say that workaround still fails because Section 122 was written for a specific kind of economic stress: a serious deterioration in the United States balance of payments, which tracks money flowing in and out of the country. Their complaint says the administration did not show that kind of crisis before taxing imports from almost the entire world. (supplychaindive.com) (reuters.com) The businesses in the case are small importers, which makes the numbers more immediate than abstract. A 10 percent tariff works like a surcharge at the border, so a company bringing in $1 million of goods now owes roughly $100,000 more before those goods even reach a warehouse. (nytimes.com) (reuters.com) The administration answered that Congress itself gave presidents this tool in 1974, and government lawyers told the court the new tariff rests on a statute the Supreme Court did not strike down. That argument asks the trade court to treat this case as a fresh legal question, not a rerun of the February defeat. (reuters.com) (nytimes.com) The court hearing is about more than one 10 percent charge. If the judges uphold this use of Section 122, presidents would have a ready-made way to keep a near-global tariff in place for months at a time even after the Supreme Court closed off the emergency-powers route. (nytimes.com) (congress.gov) If the judges strike it down, the administration loses not just revenue but leverage. The states are also seeking refunds, which could force the government to return tariff money already collected since February 24. (reuters.com) (carolinajournal.com) That is why a trade court in lower Manhattan is suddenly deciding a question that usually belongs to campaign rallies and factory tours: whether the president can turn tariffs into a standing policy tool with a different statute each time one path gets blocked. The answer now depends on whether Section 122 looks to the judges like a lawful emergency valve or a second attempt at the same policy the Supreme Court already rejected. (reuters.com) (nytimes.com)
