Trade court tests tariffs
The Court of International Trade is probing whether President Trump’s 10% global tariff can be justified under emergency-style authorities, putting the legal basis of the policy on trial. Judges pressed the administration on whether a large trade deficit alone is enough to justify sweeping levies and showed skepticism about some challenger arguments, a sign the ruling could either curb or validate the White House’s tariff playbook. (reuters.com, politico.com).
A three-judge trade court spent Friday asking whether President Donald Trump can use an emergency law to keep a 10 percent tariff on imports from nearly every country, months after broader tariffs were struck down in a different case. The hearing was in the United States Court of International Trade in New York, the court that handles fights over customs and import duties. (politico.com) The tariff at issue is Trump’s February 2026 replacement tariff, a flat 10 percent charge that applies across the board rather than country by country. The administration says that across-the-board levy can stay in place for 150 days under Section 122 of the Trade Act of 1974. (politico.com, politico.com) That matters because Trump’s earlier tariff plan was much bigger and leaned on the International Emergency Economic Powers Act of 1977, a law presidents usually use for sanctions and asset freezes. On May 28, 2025, the same trade court said that law did not give the president “unbounded authority” to impose the challenged tariffs. (cit.uscourts.gov, politico.com) So Friday’s hearing was really about the White House’s backup plan. After the earlier tariffs were knocked out, Trump switched to Section 122, a narrower trade statute that lets a president act when the United States has what the law calls “large and serious” balance-of-payments deficits. (politico.com) A balance-of-payments deficit is not the same thing as a trade deficit, and that distinction drove much of the argument. Judges pressed government lawyers on whether a long-running gap between imports and exports is enough to trigger a law written for a broader payments crisis. (reuters.com, politico.com) The administration argued that the statute gives the president wide room to decide when that kind of deficit exists. Challengers answered that Congress wrote Section 122 as a short-term emergency tool, not a standing license to put a tax on almost everything entering the country. (reuters.com, politico.com) The judges did not sound fully sold on either side. Reuters reported that the panel questioned whether a large trade deficit alone could justify sweeping levies, while also showing skepticism toward some of the challengers’ attempts to read the president’s power as almost nonexistent. (reuters.com) That leaves a narrow but important question: whether Section 122 is a temporary pressure valve or a legal doorway to a global tariff. If the court blesses this version, future presidents would have a much easier path to quick import taxes than they did under the emergency law that failed before. (politico.com, cit.uscourts.gov) If the court rejects it, the White House loses the cleanest replacement it found after the earlier defeat, and importers get another opening to challenge duties they are already paying at the border. Separate litigation over refunds from the struck-down tariffs is still moving through the courts and customs system. (politico.com, politico.com) The case looks technical, but the fight is simple: one side says Congress handed the president a 150-day screwdriver and he is trying to use it like a permanent wrench. The judges now have to decide whether Section 122 was built for a temporary trade jolt or for the kind of global tariff playbook Trump wants to keep using. (politico.com, reuters.com)
