Court questions tariff basis

A federal trade court spent more than three hours on April 10 pressing the Trump administration on whether a trade deficit alone can support its new 10 percent global tariffs. (opb.org) The case is in the United States Court of International Trade in New York, and the challengers include 24 mostly Democratic-led states, led in part by Oregon, plus small businesses. The tariffs at issue are the 10 percent import duties President Donald Trump announced after the Supreme Court blocked his earlier, broader tariff plan on February 20, 2026. (politico.com) (opb.org) This round turns on Section 122 of the Trade Act of 1974, a law that lets a president impose a temporary import surcharge of up to 15 percent for 150 days. Trump used that authority on February 20, and Customs and Border Protection said the 10 percent duty took effect on February 24. (uscode.house.gov) (whitehouse.gov) (content.govdelivery.com) Section 122 was written for what the statute calls “fundamental international payments problems,” including “large and serious” balance-of-payments deficits or a sharp dollar slide. Judges focused on what Congress meant by those terms in 1974 and whether they match the United States economy in 2026. (uscode.house.gov) (politico.com) (opb.org) That distinction matters because the administration has framed the tariffs as a response to longstanding trade imbalances, while the states say the law was aimed at a narrower kind of payments crisis tied to currency and financing stress. Oregon Attorney General Dan Rayfield said after the hearing that “Congress sets tariffs, not the president.” (katu.com) (politico.com) The states argue those crisis conditions do not exist now. They pointed to deep Treasury markets and continued access to global financing, saying the United States is not struggling to fund imports or service debt. (katu.com) The administration says Section 122 gives the president room to act when international payments problems threaten national interests, and the White House proclamation cites the balance of payments, the dollar’s standing in foreign exchange markets, and international imbalances. Trump has also said he could raise the tariff to 15 percent, though he has not done so. (whitehouse.gov) (opb.org) The judges did not rule from the bench. If the tariffs stay in place, they are scheduled to expire on July 24, 2026 unless Congress extends them, leaving the court to decide whether this stopgap tariff can survive long enough to bridge Trump to another trade authority. (opb.org) (politico.com)