U.S. court strikes down 10% tariffs

Tariffs are back in court again — and the White House lost again. On Thursday, May 7, the U.S. Court of International Trade struck down President Donald Trump’s 10% global tariff on most imports, the backup tariff plan his team rolled out after the Supreme Court killed the first round in February. That matters because this was supposed to be the simpler, sturdier version. Turns out the judges didn’t buy that either. (politico.com) ### What did the court actually do? A divided three-judge panel ruled 2-1 that Trump’s blanket 10% tariff was unlawful and entered a permanent injunction against it. The case was brought by a coalition of states and by small businesses that said the administration had gone beyond what Congress allowed. The court sits in New York and handles trade cases, so this is the specialist court for exactly this fight. (cbsnews.com) ### Why was this tariff different from the first one? The first Trump tariff program leaned on the International Emergency Economic Powers Act, or IEEPA. The Supreme Court shut that down on February 20, 2026, saying that law did not authorize tariffs. Within hours, the administration switched to Plan B — Section 122 of the Trade Act of 1974 — and imposed a temporary 10% duty on imports from nearly every country. (wilmerhale.com) ### So why did Section 122 fail too? Basically, Section 122 is not a free-floating tariff button. It is tied to a specific problem — a serious U.S. balance-of-payments deficit. The trade court said the administration’s reading was far too broad and that Trump had not identified the kind of payments (wilmerhale.com)l tax lever. (law.com) ### Does the tariff disappear right now? Not cleanly. The administration is expected to appeal, and at least some importers may keep paying while the case moves upward. That is the annoying part for companies — even when the government loses, the practical (law.com)ng. (axios.com) ### Who pushed this case? A group of businesses challenged the tariff directly, and 24 states also sued. That mix matters. It shows this was not just a theory fight among trade lawyers. Retailers, importers, and state governments all had money on the line, and they were willing to test the administration’s legal fallback almost immediately after it was announced. (cbsnews.com) ### What tools does Trump still have? The big universal-tariff routes now look much shakier. But narrower tariff authorities still exist — things like Section 232 for national security cases and Section 201 safeguard tariffs for import surges hurting domestic industries. Those tools are slower and more limited. That is the real (cbsnews.com)nnot just improvise a global one under vague statutes. (ropesgray.com) ### Why does this matter beyond one 10% number? Because companies can handle bad rules more easily than unstable rules. A tariff that appears, disappears, gets replaced, and then gets struck down again makes pricing and sourcing a mess. It also raises the political cost of using tariffs as a fast, all-purpose weapon. The legal bottleneck is becoming the story. (skadden.com) ### Bottom line This was Trump’s backup tariff plan, and the trade court just rejected it. The administration still has appeal options and narrower tariff laws to work with, but the dream of a simple 10% tariff on almost everything just hit another wall. (politico.com)