Trade‑court fights over tariffs
The U.S. Court of International Trade is now the front line for challenges to replacement tariffs, and the hearings are getting politically sharp. (Liberty Justice Center argued Congress controls taxing power and warned against statutory workarounds, while commentators and 24 states have publicly urged scrapping the replacements amid wide judicial scrutiny.) (x.com) (x.com) That litigation matters for brands because court outcomes will decide whether those new tariff rules stay, get rewritten, or vanish — and that will determine whether higher costs are temporary or baked into sourcing decisions. (x.com)
A court in lower Manhattan is deciding whether President Donald Trump can keep a 10% tax on most imports by switching legal theories after the Supreme Court knocked out his first tariff program on February 20, 2026. The fight is now in the United States Court of International Trade, the specialty court that hears customs and tariff cases. (supremecourt.gov) (cit.uscourts.gov) The old tariffs rested on the International Emergency Economic Powers Act, a 1977 law built for national emergencies. In a 6-3 ruling in *Learning Resources, Inc. v. Trump* and *Trump v. V.O.S. Selections*, the Supreme Court said that law did not let a president rewrite the tariff schedule on his own. (supremecourt.gov) Within hours of that loss, the administration moved to Section 122 of the Trade Act of 1974 instead. Section 122 lets a president impose tariffs of up to 15% for up to 150 days to address a “large and serious” balance-of-payments deficit, which is a specific external-payments problem rather than a general trade gap. (bakerdonelson.com) (politico.com) That switch is the whole case. The challengers say a modern U.S. trade deficit is not the same thing as the kind of balance-of-payments crisis Congress had in mind in 1974, so the White House is trying to squeeze a very broad tariff plan through a very narrow statutory door. (ag.ny.gov) (internationaltradeinsights.com) Two groups are pushing that argument in the trade court. One case was filed by Liberty Justice Center for small businesses on March 2026, and another was filed on March 5, 2026 by a coalition of 24 states led by attorneys general including New York, Oregon, Arizona, and California. (libertyjusticecenter.org) (ag.ny.gov) At the April 10, 2026 hearing, judges on a three-judge Court of International Trade panel pressed government lawyers on whether a large trade deficit alone can trigger Section 122. Reuters reported that the judges questioned whether the administration had shown the kind of statutory condition the law actually requires. (msn.com) (politico.com) Liberty Justice Center has framed the dispute as a separation-of-powers fight, with Jeffrey Schwab arguing that Article I gives Congress the taxing power and that presidents cannot keep hopping from one old statute to another until one sticks. That line has become central because tariffs are legally taxes collected at the border, even when politicians market them as trade policy. (libertyjusticecenter.org 1) (libertyjusticecenter.org 2) The practical question is simple: who eats the extra 10% while the case is pending. Importers pay first, customs brokers clear the goods, and brands then decide whether to raise shelf prices, accept lower margins, or shift orders to different factories and countries. (pbs.org) (libertyjusticecenter.org) Section 122 also has a built-in clock, which is why this hearing is so urgent. Even if the administration wins for now, the statute only allows those tariffs for 150 days, so every week of litigation changes how much leverage the White House has and how much money importers might later seek back in refunds. (politico.com) (ag.ny.gov) If the judges strike the tariffs down, the administration can appeal again to the United States Court of Appeals for the Federal Circuit, the same appellate court that handled the earlier tariff fight. If the judges uphold them, companies still have to plan around the 150-day limit, possible refund claims, and the chance that Congress may be forced to write a clearer rule instead of leaving the next move to presidential improvisation. (libertyjusticecenter.org) (bakerdonelson.com)
