U.S. court strikes down 10% tariffs

Tariffs are back in court again — and this time the judges knocked out Trump’s backup plan, not his original one. On May 7, the U.S. Court of International Trade ruled that the administration’s 10% across-the-board import surcharge was unlawful. That matters because this levy was supposed to keep broad tariff pressure alive after the Supreme Court had already killed Trump’s earlier, more aggressive tariff program. The catch is that the court did not shut the tariff off for everyone. It blocked enforcement only for Washington state and two importers, Burlap & Barrel and Basic Fun. ### What tariff did the court strike down? This was the newer 10% global surcharge Trump imposed on February 20, 2026, effective February 24, under Section 122 of the Trade Act of 1974. Section 122 is a narrow emergency-style trade tool. It lets a president impose temporary import surcharges, but only to deal with large and serious U.S. balance-of-payments problems. The administration used it after the Supreme Court’s February 20 decision wiped out the earlier IEEPA-based tariffs. (cit.uscourts.gov) ### Why did the judges say no? Basically, the court said the White House picked the wrong law for the job. The administration argued that big trade deficits and current-account deficits were enough to trigger Section 122. The majority said that was too broad. Congress wrote this statute for a more specific problem — balance-of-payments distress — and did not hand the president a free-floating power to slap a 10% tariff on nearly everything because the U.S. imports more than it exports. (kpmg.com) In plain English, the judges saw this as an attempt to stretch a limited statute into a universal tariff weapon. ### Why is Section 122 such a weird law? Because it looks broad at first glance, but it is actually fenced in. Congress capped Section 122 surcharges at 15% and limited them to 150 days unless Congress acts. So even if Trump had won here, this was never the same thing as an open-ended tariff regime. It was a stopgap tool — useful for leverage, but legally fragile from day one. That fragility is exactly what the challengers attacked. (polsinelli.com) ### Who actually won? Not everybody who sued. The court granted a permanent injunction for Washington state, Burlap & Barrel, and Basic Fun, but dismissed the claims of Oregon and a long list of other states for lack of standing. That narrow remedy matters a lot. It means most importers are still stuck paying the tariff unless they are covered by this case, win their own case, or the ruling expands on appeal. So the headline sounds sweeping, but the immediate practical effect is much narrower. (ntu.org) ### Why doesn’t this end the tariff right now? Because the Justice Department moved quickly to appeal, and higher courts could pause or reverse the ruling. Also, trade cases now live in the shadow of the Supreme Court’s recent skepticism toward nationwide injunctions. That helps explain why the trade court limited relief to the specific plaintiffs instead of shutting the tariff off nationwide. So for businesses, this is less “tariff gone” than “tariff legality is cracking again.” (cit.uscourts.gov) ### Why does this matter beyond these three plaintiffs? Because it weakens the administration’s whole theory that, if one tariff path gets blocked, another old statute can do the same work. First the courts rejected IEEPA as a tariff authority. Now the trade court has rejected Section 122 for this 10% universal levy. That does not mean Trump is out of tariff options — there are still more targeted laws on the books — but it does mean the dream of a fast, president-only global tariff keeps running into legal walls. (abcnews.com) ### So what’s the bottom line? This ruling is narrow in who it helps, but broad in what it says. The court is signaling that presidents cannot just keep rummaging through old statutes until they find one vague enough to support a universal tariff. If that reasoning survives appeal, Trump loses not just one 10% surcharge, but a big chunk of the legal improvisation behind his trade strategy. (polsinelli.com) (bdo.com)