U.S. court weighs 10% tariff

A court in lower Manhattan is hearing a fight over a tariff that touches almost every imported product coming into the United States: a 10% surcharge the Trump administration put in place on February 24, 2026. A three-judge panel at the United States Court of International Trade is hearing arguments on April 10 after 24 states and two small businesses asked it to block the policy. (reuters.com) (cit.uscourts.gov) This tariff is not the same legal move Trump used before. After the Supreme Court ruled on February 20, 2026 that the International Emergency Economic Powers Act of 1977 does not let a president impose tariffs, the White House switched to Section 122 of the Trade Act of 1974 within hours. (congress.gov) (whitehouse.gov) Section 122 is a narrow backup tool, not a blank check. The law says a president can impose a temporary import surcharge of up to 15% for no more than 150 days unless Congress extends it, and it ties that power to “fundamental international payments problems,” which is basically a country-level cash-flow emergency with the rest of the world. (federalregister.gov) (congress.gov) The administration says that standard fits because the United States runs persistent trade deficits and needs a fast tool to rebalance imports. The White House fact sheet said Trump signed the proclamation to address international payment problems and “rebalance” trade relationships, and customs guidance said the 10% duty would run through July 24, 2026 unless something changed first. (whitehouse.gov) (internationaltradeinsights.com) The challengers say the government is trying to squeeze a routine trade gap into a law written for a short-term monetary crisis. The multistate lawsuit says Section 122 was meant for unusual balance-of-payments emergencies, not the normal fact that a rich consumer economy like the United States often buys more goods than it sells. (politico.com) (usnews.com) The states behind the case include New York, California, Oregon, and Arizona, and the business case was brought by spice importer Burlap & Barrel and toy company Basic Fun. Those companies are a useful picture of the problem: they are not giant multinationals, but they still have to decide now whether to raise prices, eat the cost, or reorder from different suppliers. (politico.com) (reuters.com) (supplychaindive.com) The legal question is bigger than one 10% charge. If the court says Section 122 can be used this broadly, a president would have a ready-made way to reimpose wide tariffs after losing under a different statute, and if the court says no, it would cut off one of the last fast lanes for unilateral tariff action. (nytimes.com) (thehill.com) That is why importers are treating this like a live business problem, not a law-school argument. Even a tariff that lasts only 150 days can scramble purchase orders, shipping schedules, and holiday inventory plans, because companies have to commit to containers and contracts weeks or months before goods reach a United States port. (supplychaindive.com) (reuters.com) The hearing on April 10 is only one stop. Whatever the trade court does, the losing side is likely to appeal, because the same fight keeps returning to the same basic question: when Congress writes tariff laws loosely, how much room does a president have to turn them into a tax on nearly everything that crosses the border. (reuters.com) (congress.gov)