Tariffs face court test
A U.S. trade court heard arguments challenging the legal basis for President Trump’s 10% global tariffs, with judges questioning whether a trade deficit alone justifies broad import taxes. Twenty‑four states and a group of small businesses urged the court to strike the tariffs as reliant on an outdated law, but coverage noted judges also appeared skeptical of the legal challenge—leaving the outcome uncertain. (reuters.com) (bloomberg.com) (abcnews.com)
The judges did not spend Friday arguing about whether tariffs are good policy. They spent three hours on a narrower question: whether President Donald Trump had the legal power to put a 10% tax on imports from nearly every country on February 24. (abcnews.com) (nbcnews.com) The case is in the United States Court of International Trade, a specialized federal court in New York that handles customs and trade fights. Twenty-four states and two small businesses asked that court to throw out the tariff order. (cit.uscourts.gov) (usnews.com) This fight exists because the Supreme Court cut off Trump’s first route. On February 20, 2026, the Court said the International Emergency Economic Powers Act does not let a president impose broad tariffs, so the administration switched the same day to a different law from 1974. (everycrsreport.com) (nbcnews.com) That backup law is Section 122 of the Trade Act of 1974. It lets a president impose a temporary import surcharge of up to 15% for no more than 150 days unless Congress extends it. (law.cornell.edu) (whitehouse.gov) The administration says the trigger was a “fundamental international payments problem,” which is Washington language for a serious imbalance in money flowing in and out of the country. Trump’s February 20 proclamation said a 10% surcharge was needed to deal with large United States balance-of-payments deficits, and Customs and Border Protection said the duties took effect on February 24. (whitehouse.gov) (govdelivery.com) The challengers say that is a stretch. Their lawyers told the court Section 122 was written for old-style currency and payments crises, not as a catchall tool for taxing almost everything Americans buy from abroad. (bloomberg.com) (abcnews.com) The judges sounded uneasy with the administration’s theory on one key point. Reuters reported that members of the panel pressed government lawyers on whether a trade deficit by itself is enough to justify a worldwide tariff, which is like asking whether buying more than you sell automatically counts as the kind of emergency Congress had in mind in 1974. (reuters.com) But the hearing did not break cleanly against Trump. ABC News reported that the panel also appeared skeptical of the legal attack itself, especially on whether the court should read strict limits into a statute that gives the president short-term tariff authority. (abcnews.com) One reason this case matters is the calendar. Section 122 only authorizes tariffs for 150 days without Congress, and trade lawyers told Congress this short window could give the administration time to build a longer-lasting tariff plan under other laws, including Section 232 for national security and Section 301 for unfair trade practices. (law.cornell.edu) (everycrsreport.com) So the court is deciding more than one 10% tax. If the judges strike this order down, Trump loses the temporary bridge he used after the Supreme Court shut the first door; if they uphold it, the administration keeps a global tariff in place while it looks for sturdier legal footing. (nbcnews.com) (politico.com)
