Federal court hears tariff fight
A federal court heard arguments this week challenging the administration’s 10% global tariffs and whether the 1974 statute used to justify them applies to routine trade deficits. States including Oregon argue the law was meant for monetary crises, not steady trade policy, and judges are now weighing that legal claim. The litigation could affect import prices and retailers still adjusting to the temporary tariff regime. (opb.org, chicagotribune.com)
A federal trade court spent more than three hours on April 10 testing whether President Donald Trump can keep his new 10% global import tariff in place under a half-century-old law. (opb.org) The case is in the U.S. Court of International Trade in New York, where two dozen states and some businesses are challenging the tariff. Oregon is part of the state coalition, and Liberty Justice Center represents some of the private plaintiffs. (opb.org, law.cornell.edu) The administration switched to Section 122 of the Trade Act of 1974 after the Supreme Court ruled on February 20, 2026, that the earlier tariffs imposed under the International Emergency Economic Powers Act did not authorize tariffs. Within hours, Trump announced a new 10% surcharge under Section 122. (opb.org, whitehouse.gov) Section 122 is narrower than the emergency law the White House used first. The statute lets a president impose tariffs of up to 15% for 150 days to deal with “large and serious” balance-of-payments deficits, and congressional approval is needed to keep them going after that. (law.cornell.edu, opb.org) That legal phrase is the center of the fight. Judges pressed both sides on what Congress meant by “balance-of-payments deficits” in 1974 and whether that term covers the kind of long-running U.S. trade deficit Trump cited in his February proclamation. (opb.org, federalregister.gov) Trump’s February proclamation says the surcharge is meant to address “fundamental international payments problems” and keeps it in place until July 24, 2026. U.S. Customs and Border Protection separately told importers the 10% duty applies to goods from every country for that 150-day period. (whitehouse.gov, content.govdelivery.com) Oregon has argued for a year that tariff power belongs to Congress, not the president acting alone. In the earlier case, the state’s lawyers told the Supreme Court that only Congress can impose and collect taxes under the Constitution, and the court’s majority agreed on the broader emergency-law dispute. (opb.org, opb.org) The practical stakes are immediate for importers and retailers because the tariff is already being collected. Oregon Attorney General Dan Rayfield said in February that 80% of tariff costs are passed on to consumers, while former trade official Ryan Majerus told The Associated Press he expects the trade court to defer to the president and leave the Section 122 tariffs in place for the few months remaining. (opb.org, opb.org) No ruling came from the bench on Friday. For now, the judges are weighing whether Section 122 was written for a monetary crisis or whether it can carry a 10% tariff on nearly everything Americans import. (opb.org, law.cornell.edu)
