Trump's 10% tariffs limited by court

Tariffs are back in court again — and this time the fight is over Trump’s fallback plan. On May 7, the U.S. Court of International Trade said the administration could not use Section 122 of the 1974 Trade Act to slap a 10% tariff on nearly all imports. But the court did not wipe the tariff away for everyone. It blocked collection only for the plaintiffs that actually proved standing, which means the policy is wounded, not dead. ### What was this tariff, exactly? This was Trump’s replacement global tariff — a 10% import surcharge announced on February 20, 2026, after the Supreme Court had already knocked out his earlier “Liberation Day” tariffs that leaned on emergency powers. The new version used Section 122 instead, a narrower law that lets a president impose temporary import surcharges of up to 15% for no more than 150 days. The administration set the tariff to start February 24 and run until July 24 unless Congress extended it. (cit.uscourts.gov) ### Why did the court say no? Basically, the judges said Section 122 is not a general-purpose tariff button. Congress wrote it for “fundamental international payments problems” — think balance-of-payments stress, not the ordinary fact that the U.S. imports more goods than it exports. The majority said the administration tried to stretch that old statute far beyond what Congress had in mind. That is the core of the ruling. (hklaw.com) ### Why only three winners? Because standing mattered as much as the tariff law. A big coalition sued — 24 mostly Democratic-led states plus private importers. But the court found only Washington state, Burlap & Barrel, and Basic Fun! had shown the kind of direct injury needed for relief. So the injunction protects those plaintiffs, while the rest of the states were dismissed for lack of standing. (hklaw.com) ### Does that mean the tariff is still being collected? For almost everyone, yes. That is the catch. The court called the tariff unlawful, but because the injunction is plaintiff-specific, most importers still face the 10% duty for now. In practical terms, the ruling is a legal warning shot and a precedent other companies may try to use, not an immediate nationwide shutdown of the tariff. (cit.uscourts.gov) ### Why does Section 122 matter so much? Because it was the administration’s backup route after losing the first tariff case. Section 122 had never been used this way before. So this ruling is not just about one surcharge. It is another court telling the White House that broad tariff power has real statutory limits, even when the administration tries a different legal theory. (globalimportblog.bakermckenzie.com) ### What happens next? The administration appealed on May 8 to the U.S. Court of Appeals for the Federal Circuit. That means the next question is not whether the trade court disliked the tariff — it clearly did — but whether the appeals court agrees that Section 122 cannot support it. Since the tariff was designed as a temporary measure expiring July 24, timing matters a lot. A fast appellate win could restore the policy’s footing before the clock runs out. (news.bloomberglaw.com) ### Why should businesses care now? Because uncertainty is the real tax here. If you are one of the named plaintiffs, you got relief. If you are not, you are still paying while also wondering whether refunds, copycat lawsuits, or another legal reversal are coming. That is brutal for companies that price inventory months ahead and depend on global supply chains. (cnbc.com) ### Bottom line? The court did not end Trump’s 10% tariff across the board. It said the legal foundation looks wrong, but only a few plaintiffs got immediate protection. So the administration still has room to fight — and importers still have to live with a tariff regime that could change again within weeks. (cit.uscourts.gov) (politico.com)