Tariff plan faces courts

A federal trade court is openly testing whether President Donald Trump had legal authority to slap a 10% tariff on imports from nearly every country. (usnews.com) The case was argued on Friday, April 10, in the United States Court of International Trade in New York after 24 mostly Democratic-led states and two small businesses sued to block the tariffs. The import tax took effect on February 24. (usnews.com) Trump imposed the new tariff under Section 122 of the Trade Act of 1974, a law that allows duties of up to 15% for 150 days during a “large and serious” United States balance-of-payments deficit. The administration says the United States trade deficit meets that standard. (usnews.com; news.bloomberglaw.com) The dispute turns on a narrow question with big consequences: whether a trade deficit is the same thing, in law, as a balance-of-payments deficit. During a hearing that lasted more than three hours, judges pressed both sides on what Congress meant when it used that language in 1974. (opb.org; axios.com) That matters because the Supreme Court already struck down Trump’s earlier global tariffs on February 20, ruling that the International Emergency Economic Powers Act of 1977 did not authorize tariffs. Trump announced the Section 122 tariffs the same day as a fallback. (opb.org; nbcnews.com) Section 122 has never been used before to impose tariffs, and it is temporary by design. The current 10% tariff is scheduled to expire on July 24 unless Congress approves an extension, and Trump has said he wants to raise it to 15% but has not done so. (opb.org; nbcnews.com) The states say Section 122 was written for short-term currency and international payments problems, not for a long-running gap between imports and exports. In their March 5 complaint, they said Trump’s proclamation was “fatally flawed” and accused him of stretching a rarely used statute past its limits. (usnews.com; news.bloomberglaw.com) Oregon Attorney General Dan Rayfield is leading the state coalition, and Oregon officials say the tariffs would raise costs for manufacturers, farmers, ports, and small businesses tied to global trade. Governor Tina Kotek backed the suit and urged Congress to reclaim more control over tariff policy. (opb.org; oregon.gov) The White House says Trump is acting within authority that Congress already granted. Spokesman Kush Desai said the administration would “vigorously defend” the tariffs as a response to what it calls fundamental international payments problems. (news.bloomberglaw.com) No ruling came from Friday’s hearing, but the judges’ questions showed the case is now centered on one old statutory phrase and whether it can carry a modern global tariff plan. If the court rejects that reading, Trump’s backup tariff strategy could fail just weeks before the July 24 deadline. (opb.org; axios.com)