U.S. trade court rules Trump’s 10% global tariffs unlawful

Tariffs are back in court — again. A three-judge panel on the U.S. Court of International Trade ruled on May 7 that Donald Trump’s 10% global import surcharge was unlawful, which is a big problem for a White House that had already switched to this tariff as its backup plan after losing at the Supreme Court earlier this year. The catch is that the ruling does not wipe the tariff off the map for everyone right away. It blocks enforcement for the winning plaintiffs while an appeal plays out. (usnews.com) ### What tariff did the court strike down? This was the across-the-board 10% tariff Trump imposed on February 20, 2026 under Section 122 of the Trade Act of 1974. That law lets a president impose a temporary surcharge of up to 15% to address serious balance-of-payments problems. Trump turned to it after the Supreme Court said the administration could not use the International Emergency Economic Powers Act — IEEPA — as a tariff tool. Basically, this 10% tariff was Plan B. (globaltaxnews.ey.com) ### Why did the judges say no? The panel said the administration had not met the statute’s actual test. Section 122 is not a general-purpose “tariff whenever you want” power. It is narrower, temporary, and tied to a specific economic problem — serious international payments trouble. The court concluded the government’s justification did not fit that requirement, so the proclamation and the duties collected under it were unauthorized by law. The vote was 2-1. (usnews.com) ### Who actually won the case? That part matters more than it sounds. The court granted relief to the State of Washington and to two importers — Burlap and Barrel and Basic Fun. But it dismissed the claims of the other state plaintiffs for lack of standing. So this was not a clean nationwide shutdown of the tariff. It was a narrower injunction tied to the parties the court said had properly shown injury. (cit.uscourts.gov) ### So are the tariffs still being collected? For most importers, yes — at least for now. Reuters and other outlets say the ruling leaves the 10% tariff in place for everyone except the successful plaintiffs while the administration appeals. That means the practical effect is real but limited. If you are not one of those plaintiffs, customs treatment does not instantly change just because the opinion came out. (usnews.com) ### Why is this such a blow politically? Because this was already the replacement tariff. Trump’s first, broader tariff regime had just been knocked out after the Supreme Court held that IEEPA does not authorize tariffs. The administration then pivoted to Section 122, which had never been used before for this kind of sweeping global levy. Now that workaround has run into another court loss. That narrows the legal playbook fast. (duanemorris.com) ### Does this kill Trump’s trade agenda? Not exactly. The White House can appeal, and it can keep looking for other statutory routes. But each route comes with its own limits. That is the bigger story here — trade policy is no longer just a negotiation with other countries. It is also a litigation strategy at home, and courts are forcing the administration to match each tariff to a very specific law. (usnews.com) ### Why should regular people care? Because even “temporary” tariffs ripple outward. Importers pay them first, but the cost can move through supply chains into consumer prices, margins, and sourcing decisions. A tariff that is legally shaky is even messier — companies have to decide whether to absorb the cost, pass it on, or gamble on refunds later. That uncertainty can be almost as disruptive as the tariff itself. (supplychaindive.com) ### Bottom line This ruling did not end Trump’s 10% global tariff for everyone. But it did something almost as important — it told the administration that its second legal theory for broad tariffs may be too thin as well. So the fight now shifts from “can Trump impose tariffs?” to a more specific question: under exactly which law, and for whom, can he make them stick? (usnews.com)