US trade court reviews 10% tariff

A three-judge panel at the United States Court of International Trade heard arguments on April 10 over a 10% tariff the Trump administration put on most imports on February 24, just four days after the Supreme Court struck down a broader set of Trump tariffs. (usnews.com) The administration’s backup plan uses Section 122 of the Trade Act of 1974, a law that allows tariffs of up to 15% for as long as 150 days during a “large and serious” United States balance-of-payments deficit. (usnews.com) The fight is over what kind of deficit that law was written for. The states and small businesses suing say a normal trade gap, where the United States buys more goods than it sells, is not the same thing as the monetary emergency Section 122 was built to handle. (usnews.com) The challengers are 24 mostly Democratic-led states plus two small businesses. They are asking the trade court to block the tariff before the 150-day window closes, because once importers pay the duty at the border, the cash is already gone. (usnews.com) (politico.com) This is the second tariff case in less than two months because the first legal route failed. On February 20, 2026, the Supreme Court said the International Emergency Economic Powers Act did not give the president the power to impose the earlier sweeping tariffs. (usnews.com) (budgetlab.yale.edu) The new case is narrower but not small. Section 122 has never been used by any previous president to impose tariffs, so the judges are testing a statute with almost no real-world precedent behind it. (usnews.com) (politico.com) While the lawyers argue about old trade law, economists are measuring what the tariffs already did to prices. A Federal Reserve note published on April 8 estimated that tariffs imposed through November 2025 raised core goods prices by 3.1% through February 2026. (federalreserve.gov) That same Federal Reserve note said the tariffs explain all of the excess inflation in core goods relative to pre-pandemic rates, and added about 0.8% to core personal consumption expenditures inflation overall. Core personal consumption expenditures is the Federal Reserve’s main inflation gauge once food and energy are stripped out. (federalreserve.gov) The researchers also found that the pass-through was basically complete after seven months. In plain English, that means the tariff showed up in shelf prices much like a sales tax shows up on a receipt, only it started at the border instead of the checkout line. (federalreserve.gov) Other estimates land in the same neighborhood even when they use different methods. The Budget Lab at Yale said the 2025 tariffs lifted the effective tariff rate to 10.6% in January 2026 and generated $214.7 billion in extra customs revenue above the 2022 to 2024 average by February 2026. (budgetlab.yale.edu) Who paid that bill is the part businesses care about. A New York Federal Reserve analysis summarized by CBS News found that United States firms and consumers bore nearly 90% of the tariff burden in 2025, with importers still paying 86% as of November. (cbsnews.com) So the court case is not just about presidential power. It is also about whether a 10% border tax that is already showing up in goods inflation stays in place long enough to keep pushing up the cost of everything from inventory and packaging to the ads used to sell them. (usnews.com) (federalreserve.gov)