Tariffs face fresh court fight

A trade court in New York spent Friday hearing a fight over a tax that touches almost every imported product entering the United States: President Donald Trump’s 10 percent global tariff. The case is in the United States Court of International Trade, the federal court that handles customs and trade disputes. (pbs.org) (cit.uscourts.gov) This is Trump’s second legal route to the same policy. On February 20, 2026, the Supreme Court ruled that the 1977 International Emergency Economic Powers Act did not let him impose the broader tariffs he announced last year. (supremecourt.gov) (congress.gov) After that loss, the White House switched to Section 122 of the Trade Act of 1974. That law lets a president add a temporary import surcharge of as much as 15 percent for 150 days without first getting Congress to vote. (pbs.org) (law.cornell.edu) (whitehouse.gov) Trump used that fallback on a global scale, but at 10 percent instead of the 15 percent ceiling. According to the White House order and reporting on the hearing, the temporary tariff is set to expire on July 24, 2026, unless Congress extends it. (whitehouse.gov) (pbs.org) The legal argument now turns on an old phrase: “balance of payments.” Section 122 was written for a world in which the dollar was still tied to gold, and it targets international payments problems, not the ordinary gap between what the United States buys and what it sells. (pbs.org) (law.cornell.edu) The states suing say Trump is mixing up two different numbers. A trade deficit is about goods crossing borders, while a balance-of-payments problem is a broader money-flow problem, and the plaintiffs say “they are not the same thing at all.” (politico.com) (cnbc.com) The challengers are 24 mostly Democratic-led states, led by New York, California, Oregon, and Arizona, along with small businesses. They want the court to block the tariff and order refunds for money already collected. (politico.com) (cnbc.com) That refund request is not theoretical. On March 4, 2026, Judge Richard Eaton ruled that companies that paid the earlier tariffs struck down by the Supreme Court are entitled to get that money back. (cbsnews.com) (usnews.com) The awkward part for the administration is that its own lawyers argued last year that Section 122 did not have any obvious fit for trade deficits. The awkward part for the challengers is that the trade court itself had previously suggested Section 122 was available after the emergency-powers route failed. (pbs.org) So the court is not deciding whether tariffs are popular or tough or inflationary in the abstract. It is deciding whether Congress actually gave the president this specific temporary tool, for this specific problem, under a statute written in 1974. (law.cornell.edu) (congress.gov) For importers, retailers, and manufacturers, the practical problem is timing. A tariff that can disappear by court order, expire on July 24, or jump from 10 percent to 15 percent is hard to build into contracts, prices, and shipping plans. (pbs.org) (cnbc.com) That is why this hearing matters even before any ruling lands. Trump found a backup key after the Supreme Court took away the first one, and now the trade court is deciding whether that second key actually fits the lock. (supremecourt.gov) (pbs.org)