Federal court strikes down Trump's 10% blanket tariffs

Tariffs are back in court again — and this time Trump’s backup plan got hit. On May 7, a divided panel at the U.S. Court of International Trade said the administration could not use Section 122 of the Trade Act of 1974 to slap a 10% tariff on most imports. That matters because this was the White House’s replacement tool after earlier Trump tariffs were already knocked down. But the catch is that the ruling is legally big and immediately narrow at the same time. ### What did the court actually strike down? The court struck down the February 2026 proclamation that imposed a 10% global tariff under Section 122. That law lets a president use temporary import surcharges of up to 15% for no more than 150 days when the U.S. faces serious balance-of-payments problems. The majority said Trump’s use of that authority did not fit the statute. (politico.com) ### Why was Trump using Section 122 at all? Because his first, broader tariff theory had already run into the courts. The administration had leaned on emergency powers under IEEPA for sweeping tariffs, and those duties triggered a separate refund system now being built by Customs and Border Protection. Section 122 was the fallback — older, narrower, and never really meant to be a general all-purpose tariff switch. (politico.com) ### So did all importers just win? No — and this is the part that makes the story feel more dramatic than the immediate effect. The court limited relief to the plaintiffs it said had standing: Washington state and the two companies that sued, Burlap & Barrel and Basic Fun! For most importers, the 10% tariff can keep being collected while the appeal moves forward. (cbsnews.com) ### Why is the ruling still a big deal then? Because courts are now rejecting not just one Trump tariff theory but the backup theory too. Think of it like losing your first key, then finding out the spare key is cut wrong. Even if the door stays shut for most businesses today, the legal route the White House wanted to use keeps getting narrower. That changes how much leverage the administration really has in trade fights. (politico.com) ### What about the refund portal people keep mentioning? That portal is real, but it is for IEEPA duty refunds, not this Section 122 ruling by itself. CBP launched the first phase of its CAPE system on April 20, 2026, to process valid IEEPA refund claims through the ACE portal. CBP says valid refunds will generally be issued within 60 to 90 days after a CAPE declaration is accepted. (politico.com) ### Does this mean tariff rates are dropping right now? Not much, at least not yet. CBS cited Capital Economics saying the average effective U.S. tariff rate remains 7.2%, largely because the ruling is narrow and the Section 122 tariffs were already set to expire at the end of July. So for a lot of businesses, the day-to-day math does not change immediately. The legal signal changed more than the cash flow changed. (cbp.gov) ### What happens next? The administration is expected to appeal to the U.S. Court of Appeals for the Federal Circuit. More businesses could also file their own suits, using this opinion as a roadmap. So the next phase is less about one dramatic stop and more about whether this narrow ruling spreads plaintiff by plaintiff — or gets reversed. (cbsnews.com) ### Bottom line? Trump’s 10% blanket tariff was supposed to be the durable replacement for a tariff program courts had already weakened. Turns out that replacement looks shaky too. The ruling does not instantly erase the tariff for everyone, but it tells businesses, trade lawyers, and foreign governments that the president’s tariff authority is looking a lot less automatic than the White House wanted. (politico.com)