U.S. trade court reviews 10% tariff

A federal trade court is deciding whether President Donald Trump could legally slap a 10% tariff on most imports after his earlier tariff plan was struck down. (reuters.com) A three-judge panel at the United States Court of International Trade heard arguments in New York on Friday, April 10. The challengers are 24 mostly Democratic-led states and two small businesses, and they are asking the court to block the tariff that took effect on February 24. (reuters.com) The legal fight turns on Section 122 of the Trade Act of 1974, a law that lets a president impose import surcharges of up to 15% for up to 150 days to address a “large and serious” United States balance-of-payments deficit. Trump used that law for this tariff after the Supreme Court ruled on February 20 that the International Emergency Economic Powers Act does not authorize tariffs. (congress.gov, reuters.com) The states and businesses say Section 122 was written for a different monetary system and cannot be used to answer a modern trade deficit. In a court brief, they argued the statute was tied to balance-of-payments problems from the fixed-exchange-rate era and does not fit the current economy. (carolinajournal.com, bloomberg.com) Justice Department lawyers told the court the law still reaches current account deficits and gives the president room to act for 150 days without Congress. Government briefing in the case argues that current account deficits are balance-of-payments deficits and that the United States deficit is “large and serious.” (reason.com, abcnews.go.com) The court’s questions showed the judges pressing both sides on how far Section 122 goes. Reuters reported that judges challenged whether a large trade deficit alone is enough, while ABC News said the panel also appeared skeptical of the challengers’ effort to knock down the tariff. (reuters.com, abcnews.go.com) This is the second major court test of Trump’s tariff powers in less than two months. The Supreme Court’s February 20 decision shut down his broader tariff program under the emergency-powers law, and the administration turned to Section 122 four days later. (congress.gov, bloomberg.com) A separate lawsuit by importers, including Burlap and Barrel, is also challenging the Section 122 tariff in the same court. Liberty Justice Center said oral arguments in that case were also heard on April 10. (libertyjusticecenter.org, bakerdonelson.com) No ruling came from the bench on Friday. For now, the 10% tariff remains in effect while the Court of International Trade decides whether Section 122 can carry the weight of Trump’s replacement tariff plan. (abcnews.go.com, reuters.com)