Trade court questions tariffs

Three federal trade judges spent nearly three hours on April 10 pressing the administration on a basic question: how does a 1974 law about international payments let a president put a 10% tax on imports from almost everywhere in 2026. No ruling came from the bench, but the questions were skeptical enough to put the tariff’s legal footing in doubt. (reuters.com) (politico.com) The fight is over a tariff President Donald Trump announced on February 20, 2026, and put into effect on February 24 at 12:01 a.m. Eastern time. The order imposed a 10% ad valorem duty, which means a 10% charge based on the value of the imported good, and the administration said it was temporary. (whitehouse.gov) (federalregister.gov) This was not the administration’s first try. In 2025 Trump used the International Emergency Economic Powers Act, a 1977 emergency law, to justify broader tariffs, and the Supreme Court struck those tariffs down on February 20, 2026, saying that law did not authorize tariffs for that purpose. (pbs.org) (nbcnews.com) So the White House switched to Section 122 of the Trade Act of 1974, which is a backup tool Congress wrote for short bursts of import restrictions. That section lets a president impose a temporary surcharge of up to 15% for 150 days, and any extension beyond that needs Congress. (law.cornell.edu) (pbs.org) That 150-day clock is why this case matters so much. If you count 150 days from February 24, the tariff is scheduled to expire on July 24, 2026, unless Congress extends it or the administration finds another legal route. (pbs.org) (politico.com) The plaintiffs are 24 mostly Democratic-led states and two small businesses, and they say Section 122 was written for an older money problem, not for today’s trade gap. Their argument is that “international payments problems” in 1974 meant stress tied to the dollar, gold, and currency markets, not a standing complaint that the United States buys more goods than it sells. (reuters.com) (pbs.org) The judges kept circling that same point. Reuters reported that members of the panel questioned whether a large trade deficit by itself is enough to count as the kind of “fundamental international payments problem” Congress had in mind. (reuters.com) (politico.com) There is an awkward twist for the government. In a filing from the earlier tariff fight, the Justice Department argued that Section 122 did “not have any obvious application” to trade deficits, which gave the challengers a line they could throw back at the administration in this new case. (pbs.org) Judge Timothy Stanceu put the problem bluntly when he said the court was not sure how to translate a 1974 statute into the global economy of 2026. That is the whole case in one sentence: a law written in the Nixon era is now being used as a bridge for a modern tariff program the Supreme Court already clipped once. (politico.com) The White House has already signaled that this tariff is a bridge, not the final structure. Politico and other outlets reported that the administration wants to keep duties in place while it shifts toward other authorities, including tools that can support more permanent tariffs on specific sectors or countries. (politico.com) (ustr.gov) That leaves importers in a familiar spot: paying a tariff that is active today, facing a court that may knock it out later, and watching a July 24 deadline that could force Congress or the White House to make the next move. The hearing did not settle the policy, but it did make one thing clearer: the legal fight over who gets to impose broad tariffs in the United States is still not over. (reuters.com) (pbs.org)