Court hears 10% tariff challenge
A federal trade court began hearing whether the administration’s new 10% global import tax is legal, a test that could determine whether the tariff is a durable policy or a temporary workaround. Plaintiffs — states and small businesses — argue the measure sidesteps an earlier Supreme Court ruling and improperly expands tariff calculation rules tied to Section 232, which can change cost accounting for products with embedded steel. The decision matters for importers, manufacturers and distributors who may need to redesign supply chains or revise pricing if the tariff posture is reversed. (reuters.com)
A three-judge panel at the U.S. Court of International Trade spent Friday hearing whether President Donald Trump’s new 10% tax on many imports can stay in place, even after the Supreme Court knocked out his earlier emergency tariffs on February 20, 2026. The new levy took effect on February 24, and 24 states plus two small businesses are asking the court to block it. (usnews.com) (congress.gov) The administration is now leaning on Section 122 of the Trade Act of 1974 instead of the International Emergency Economic Powers Act, the 1977 law the Supreme Court said does not authorize tariffs. Section 122 is a narrower tool Congress wrote for balance-of-payments problems, not a general all-purpose tariff power. (congress.gov) (justthenews.com) That legal switch is the whole case. The states and businesses say the White House lost one route at the Supreme Court and immediately tried a different door to keep the same policy alive. (nytimes.com) (politico.com) The court hearing is not about one product or one country. It is about a flat 10% charge that reaches across much of the import system, which is why retailers, distributors, and manufacturers are watching a court in lower Manhattan as closely as they watch ports and factories. (usnews.com) (virginiabusiness.com) At the same time, the White House changed a different tariff program on April 2. In a proclamation published April 9 in the Federal Register, it rewrote how Section 232 national-security tariffs apply to steel, aluminum, and copper products. (federalregister.gov) (whitehouse.gov) Before that change, many mixed products were taxed only on the value of the metal inside them. After April 6, many of those tariffs are calculated on the full customs value of the entire imported product, which is like taxing the whole car because of the steel in the frame instead of taxing only the steel itself. (whitecase.com) (kpmg.com) That accounting change is why this lawsuit reaches past lawyers and into pricing desks. A machine part, appliance, or industrial component can now face the 10% global tariff fight in court while also facing a broader metal-duty calculation at the border. (reuters.com) (whitecase.com) The Supreme Court’s February ruling was a 6-3 decision in Learning Resources v. Trump and Trump v. V.O.S. Selections, and it said the emergency-powers statute did not let the president impose tariffs. That left most older trade tools intact, but it forced the administration to defend every new tariff under a more specific law. (congress.gov) (scotusblog.com) If the trade court strikes down the 10% levy, importers may push for refunds and rewrite contracts that assumed the extra cost would stay. If the court upholds it, companies will have to treat the tariff less like a temporary shock and more like a standing cost of doing business in 2026. (bloomberg.com) (cfr.org) So the question in court is simple even if the statutes are not: after the Supreme Court said no to one tariff shortcut on February 20, can the White House keep a global import tax alive by recasting it under a different law four days later. The answer will decide whether this 10% charge is a durable part of U.S. trade policy or another temporary layer that disappears after the next ruling. (congress.gov) (usnews.com)
