US 10% tariffs faces courtroom test

Three judges on the United States Court of International Trade spent hours pressing government lawyers on a basic question: where, exactly, does the president get the power to put a 10% tariff on imports from nearly every country on earth? The hearing on April 10 showed real skepticism that a trade deficit, by itself, counts as the kind of emergency that unlocks that power. (reuters.com) (apnews.com) This fight exists because the administration’s first legal route already blew up. On February 20, 2026, the Supreme Court ruled in Learning Resources v. Trump that the International Emergency Economic Powers Act of 1977 does not let a president impose tariffs, wiping out the earlier tariff program built on that law. (sidley.com) (hklaw.com) Within hours of that loss, the White House switched statutes. It announced a new 10% global tariff under Section 122 of the Trade Act of 1974, a law that allows temporary tariffs of up to 15% for 150 days when the United States has what the statute calls large and serious balance-of-payments problems. (hklaw.com) (yournews.com) That sounds technical, but the courtroom argument was simple. The judges asked whether a modern U.S. trade deficit is the same thing as the kind of balance-of-payments crisis Congress had in mind in 1974, when the country was dealing with currency strains and dwindling reserves, not routine goods deficits with trading partners. (apnews.com) (everycrsreport.com) Section 122 is also narrow on purpose. Congress capped it at 15% and 150 days because it was designed as a short bridge, not a permanent trade system, and judges spent part of the hearing probing whether the administration was trying to turn a temporary patch into a standing weapon. (yournews.com) (everycrsreport.com) The White House’s own earlier paperwork helps explain the vulnerability. In April 2025, President Trump declared a national emergency over “large and persistent” trade deficits and used that declaration to justify a 10% tariff on all countries, which is broad language that looks more like a global policy choice than a response to a sudden financial rupture. (whitehouse.gov) (federalregister.gov) The people suing are not just foreign governments. A coalition of states and small businesses argues that Congress, not the president, controls tariffs, and that using emergency-style powers to tax almost every imported product is like using a fire alarm to rewrite the building code. (reuters.com) (apnews.com) Even before a ruling, companies are acting as if the legal ground under U.S. tariff policy can shift overnight. CTV reported on March 31 that Canadian automakers are making longer-term moves to reduce dependence on the U.S. market after more than a year of tariff swings, pauses, and reversals. (ctvnews.ca 1) (ctvnews.ca 2) That is the part businesses hate most: not a tariff they can price in, but a tariff that might disappear after a court ruling, then reappear under a different law a few hours later. When judges start asking whether the backup law means what the White House says it means, every factory plan, supply contract, and sourcing map has to be redrawn in pencil. (reuters.com) (hklaw.com) If the court strikes down this 10% tariff too, the administration still has slower trade tools like Section 301 investigations and sector-specific measures, but it loses the fastest all-purpose lever it has tried to use since 2025. That would not end Trump’s trade agenda, but it would force it back through narrower laws, longer investigations, and more chances for Congress and the courts to say no. (hklaw.com) (reuters.com)