Trade court strikes down 10% tariff

Tariffs are back in court again — and this time the White House lost its backup plan. On May 7, the U.S. Court of International Trade said Donald Trump could not use Section 122 of the Trade Act of 1974 to slap a 10% tariff on imports from nearly every country. That matters because this was the administration’s replacement tool after the Supreme Court had already knocked out the broader emergency tariffs earlier this year. But the catch is that the ruling does not wipe the tariff away for everyone overnight. (politico.com) ### What tariff did the court kill? This was the flat 10% global duty Trump announced in February as a fallback after the Supreme Court struck down his earlier worldwide tariffs imposed under the International Emergency Economic Powers Act, or IEEPA. The White House tried a dif(politico.com)s balance-of-payments problems. The court said that statute did not support what Trump did here. (politico.com) ### Why did the judges say no? Basically, Section 122 is narrow. It allows a temporary surcharge of up to 15% for no more than 150 days, and it is tied to “large and serious” international payments problems. The court’s majority said the administration had not shown the kind of(politico.com)ity still controls. (politico.com) ### Who actually won relief? Not every importer. That is the part people miss. The court barred collection of the duty only for the plaintiffs it found had standing — Washington state, spice company Burlap & Barrel, and toy company Basic Fun! Politico’s account says the broader group of Democratic-led states did not all clear that hurdle, so the injunction is limited rather than nationwide. (politico.com) ### So are companies getting money back now? Not from this ruling by itself, at least not on a systemwide basis. The administration is expected to appeal, and trade lawyers quoted in coverage say the tariff will likely remain in place for nearly everyone while that happens. So this is a legal defeat for the White House, but not yet a universal refund event. (politico.com) ### Then what is the refund portal for? That is for the older IEEPA tariffs the Supreme Court already invalidated. U.S. Customs and Border Protection has built a CAPE process inside the ACE portal so importers can request refunds of those duties, with interest. Phase 1 launched(politico.com)lers upload a CSV list of entries through the ACE portal rather than using the usual broker interface. (cbp.gov) ### Why does this split matter? Because it narrows the president’s remaining tariff playbook. First the Supreme Court took away the emergency-tariff route under IEEPA. Now the trade court has rejected the Section 122 fallback too. That does not mean Trump has no tariff tools left — there are still mor(cbp.gov)all-purpose tariff powers claimed by the executive branch. (politico.com) ### What happens next? The administration can appeal to the U.S. Court of Appeals for the Federal Circuit. Until that process plays out, the practical reality is messy — one set of tariffs is already in refund mode, while this newer 10% tariff sits in legal limbo for most impor(politico.com)hether their entries fall into the refund system or the still-contested bucket. (politico.com) ### Bottom line? This was not a broad anti-tariff ruling. It was a ruling that Trump used the wrong legal tool. And in trade law, that difference is everything.