U.S. court reviews 10% tariff

A court in New York is deciding whether the White House can keep charging a 10% tax on nearly every import while the legal theory behind it is still being argued. The hearing is in the United States Court of International Trade, the small federal court that handles customs and trade fights. (reuters.com) (cit.uscourts.gov) The tariff took effect on February 24, 2026, and a group of 24 mostly Democratic-led states plus two small businesses sued to block it. They say the administration swapped in a new statute after the Supreme Court knocked out most of its earlier tariffs. (reuters.com) (thomsonreuters.com) The new statute is Section 122 of the Trade Act of 1974. That law lets a president impose a temporary import surcharge of up to 15% for no more than 150 days unless Congress extends it. (whitehouse.gov) (uscode.house.gov) The administration says Section 122 fits because the United States has “fundamental international payments problems.” In plain English, it is arguing that the country’s trade and money flows are out of balance badly enough to justify a short-term import surcharge. (whitehouse.gov) (federalregister.gov) The states and businesses say that is a stretch. Their lawsuits argue that ordinary trade deficits are not the same thing as the kind of balance-of-payments emergency Section 122 was written for. (reuters.com) (usnews.com) That distinction matters because Section 122 is narrow by design. The text of the law ties it to a “large and serious” United States balance-of-payments deficit, an imminent and significant dollar depreciation, or coordination with other countries to fix an international imbalance. (uscode.house.gov) (law.cornell.edu) This case is really the second round of the same power fight. Earlier tariffs were imposed under the International Emergency Economic Powers Act, a 1977 emergency law, and the Supreme Court later invalidated most of them. (thomsonreuters.com) (cbsnews.com) So importers are stuck in a waiting room with invoices. A company bringing in shoes, machine parts, or kitchen equipment has to decide now whether to raise prices, absorb the 10% hit, or reroute suppliers before the court says whether the tariff was lawful in the first place. (reuters.com) (thomsonreuters.com) The hearing does not cover every Trump tariff on the books. Reuters reported that the two lawsuits do not challenge separate tariffs on steel, aluminum, and copper that were imposed under other, more traditional trade authorities. (reuters.com) (ustr.gov) If the judges strike this tariff down, companies could push for refunds on duties they already paid, just as businesses did after the earlier Supreme Court ruling. If the judges uphold it, the White House will have a court-tested backup route for broad tariffs even after losing the emergency-powers route. (thomsonreuters.com) (reuters.com)