Trade court weighs replacement plan

A three-judge U.S. Court of International Trade panel is deciding whether President Donald Trump’s replacement 10 percent tariff can stay in place. (reuters.com) The panel heard arguments on April 10 in New York in lawsuits brought by 24 mostly Democratic-led states and by small businesses including Burlap and Barrel. The tariff took effect on February 24 after the Supreme Court struck down the earlier tariff program. (politico.com) (libertyjusticecenter.org) The administration switched to Section 122 of the Trade Act of 1974 within hours of the Supreme Court’s February 20 ruling in *Learning Resources, Inc. v. Trump* and *Trump v. V.O.S. Selections, Inc.*. The new proclamation set a temporary 10 percent surcharge on imports from most countries. (whitehouse.gov) (ropesgray.com) Section 122 is a backup trade power for balance-of-payments problems, which are broad mismatches in money flowing into and out of the country. The statute lets a president impose a surcharge of up to 15 percent for no more than 150 days unless Congress extends it. (law.cornell.edu) (crsreports.congress.gov) That 150-day clock matters because the current 10 percent surcharge appears set to run through July 24, 2026, unless it is ended earlier or Congress acts. Importers are paying it now while the court weighs whether the law fits the administration’s rationale. (cov.com) (federalregister.gov) At the hearing, judges pressed government lawyers on whether a large trade deficit is the kind of “fundamental international payments problem” Section 122 was written to address. Reuters reported the questioning suggested skepticism that a broad global tariff automatically fits that standard. (reuters.com) The challengers say Congress, not the White House, sets tariff policy and that Section 122 cannot be used to recreate the broader tariff regime the Supreme Court just rejected. Oregon Attorney General Dan Rayfield is leading the states’ case with Arizona, California, and New York. (doj.state.or.us) (opb.org) The administration says Section 122 gives the president temporary authority to respond quickly to international payments problems and that the new tariff rests on a different statute than the one the Supreme Court rejected. The White House proclamation says the measure is needed to address “fundamental international payments problems.” (whitehouse.gov) (federalregister.gov) Other Trump tariffs are not part of this fight. Trade lawyers note that tariffs imposed under other laws, including Section 232 on steel, aluminum, automobiles, and some other products, remained in force after the Supreme Court’s February ruling. (willkie.com) The next ruling will decide more than one tariff rate. It will test whether Section 122 can serve as a short-term bridge after the Supreme Court closed off the administration’s use of the International Emergency Economic Powers Act. (nytimes.com)