US court skeptical of tariffs
Judges in a U.S. trade court questioned whether a large trade deficit alone justifies President Trump's 10% global tariff on imports, signalling legal pushback to broad trade policy moves. The hearing highlights another layer of policy uncertainty that can influence hardware prices and supply-chain risk for tech companies. ((reuters.com))
A three-judge panel in New York spent Friday asking a basic question about President Donald Trump’s 10% tariff on nearly all imports: can a big trade gap, by itself, unlock emergency tariff power that broad. The judges sounded doubtful that the answer is yes. (reuters.com) The case is in the United States Court of International Trade, a federal court that handles customs and tariff fights. Twenty-four mostly Democratic-led states and two small businesses sued after the tariff took effect on February 24, 2026. (apnews.com) This tariff exists because the Supreme Court cut off Trump’s first route. On February 20, 2026, the Court ruled 6-3 that the International Emergency Economic Powers Act does not let a president impose tariffs. (congress.gov) After that loss, the White House switched to Section 122 of the Trade Act of 1974. That law has never been used before, and it lets a president act when the United States has “large and serious” balance-of-payments deficits. (bloomberg.com) A balance-of-payments deficit is not the same thing as buying more goods than you sell. It is a broader national ledger that tracks money flowing in and out through trade, investment, and financial transfers. (axios.com) That distinction is where the hearing got rough for the government. Judges pressed Justice Department lawyers on whether a goods trade deficit automatically counts as the kind of balance-of-payments problem Congress meant in 1974, and the lawyers did not give a clean definition. (axios.com) The administration says the tariff is a legal response to a persistent trade imbalance and says Section 122 allows a temporary import tax of up to 15%. Trump’s February 24 order set the rate at 10%, and he has said he wants room to raise it to 15%. (bloomberg.com) The challengers say Section 122 was written for a different era, when the United States still managed the dollar under the Bretton Woods system and worried about official payments strains, not today’s long-running goods deficit. They argue the White House is trying to rebuild, through a side door, tariff power the Supreme Court just rejected. (reuters.com) The practical effect is simple: importers pay the tariff at the border, and those costs ripple outward through contracts, inventories, and retail prices. For hardware companies that buy servers, chips, networking gear, batteries, or components from multiple countries, a court fight like this turns pricing into a moving target. (apnews.com) The court did not rule from the bench on April 10, 2026, so the tariff stays in place for now. That leaves companies planning summer and fall orders with two unknowns at once: whether the 10% rate survives, and whether a president can still stretch a 1974 law into a global tariff tool after the Supreme Court’s February warning. (politico.com)
