U.S. court blocks Trump's 10% tariffs

Tariffs are back in court again — and this time Trump’s fallback plan got hit. A three-judge panel at the U.S. Court of International Trade said the administration could not use Section 122 of the Trade Act of 1974 to slap a 10% tariff on imports from most of the world. But the ruling was narrow in the one place businesses care about most right now — who actually gets relief. For almost everyone, the tariff still stands while the appeal moves forward. ### What was this tariff, exactly? This was Trump’s backup tariff. After the Supreme Court knocked out his broader “Liberation Day” tariffs in February 2026, the White House pivoted to Section 122 — an older law that lets a president impose temporary tariffs of up to 15% for no more than 150 days if the U.S. has a serious balance-of-payments problem. Trump announced the 10% tariff on February 20, and it took effect on February 24. It is set to expire on July 24 unless something else replaces it. (kelleydrye.com) ### Why did the court say no? Basically, the judges said the administration used the wrong legal key for the wrong lock. Section 122 is not a general-purpose “trade deficit is bad” statute. The panel said Congress wrote it for a specific kind of balance-of-payments crisis, using the meaning that existed in 1974. Trump’s proclamation pointed to trade deficits, current-account deficits, and the U.S. net international investment position. The court said that still did not satisfy what Section 122 actually authorizes. (kelleydrye.com) ### Who actually won? Not everyone who sued. The court said only parties that could show direct tariff injury had standing to get an injunction. That meant relief for the private importer-plaintiffs and for Washington state, which the court found faced imminent duty-related harm. The other 23 states in the case did not get that remedy because the court said they had not shown they were importers of record paying those duties themselves. (kelleydrye.com) ### So why are most importers still paying? Because the court did not issue a nationwide block. That is the catch. The judges rejected the idea that harm to a few plaintiffs was enough to shut the tariff off for everybody. So even though the tariff was ruled unlawful, the practical effect is narrow for now — most importers remain stuck with it unless they are covered by the order, file their own case, or the appeal changes the picture. (kelleydrye.com) ### Did the administration appeal already? Yes. The government appealed to the U.S. Court of Appeals for the Federal Circuit on May 8, one day after the ruling. So this is not the end of the legal fight. It is more like the next turn in a long argument over how much unilateral tariff power a president actually has. (france24.com) ### Why does this matter beyond one 10% tariff? Because this was supposed to be Trump’s legally safer Plan B. The Supreme Court had already killed the broader tariff program built on emergency powers. Now the trade court has said the replacement theory does not work either. That does not end Trump’s tariff agenda — the administration is still looking at Section 301 investigations due in July — but it shrinks the menu of fast, unilateral options. (kelleydrye.com) ### What should businesses watch now? Two things. First, whether the Federal Circuit pauses or narrows the ruling further. Second, whether the White House shifts harder toward Section 301, which is slower and more procedurally heavy but has survived lots of past challenges. For importers, this is the weirdest outcome — the court says the tariff is unlawful, but many companies still have to pay it today. (france24.com) ### Bottom line? The court did not blow up Trump’s 10% tariff overnight. It did something subtler and maybe more important — it said the president’s backup legal theory does not hold, while leaving the money flow in place for most importers until the next court speaks. (kelleydrye.com)