U.S. trade court challenges tariffs

A U.S. trade court is questioning whether the Trump administration had legal authority to put a 10 percent tariff on most imports in February. (reuters.com) (cit.uscourts.gov) At an April 10 hearing in New York, a three-judge panel of the U.S. Court of International Trade pressed government lawyers on whether a goods trade deficit is the same thing as the “balance-of-payments deficit” required by Section 122 of the Trade Act of 1974. Twenty-four mostly Democratic-led states and two small businesses brought the challenge. (politico.com) (reuters.com) (libertyjusticecenter.org) President Donald Trump imposed the tariff on February 20, 2026, and it took effect on February 24. The White House said the measure was a temporary import surcharge to address “fundamental international payments problems,” and Section 122 allows tariffs of as much as 15 percent for up to 150 days. (whitehouse.gov) (federalregister.gov) (usnews.com) The tariff was Trump’s fallback after the Supreme Court, on February 20, struck down his broader tariff program under the International Emergency Economic Powers Act. The new fight is narrower, but it tests how far a president can go in using old trade laws without Congress. (politico.com) (jurist.org) (pbs.org) Treasury’s March figures showed customs-duty receipts of about $22.2 billion, down from $26.6 billion in February and below the monthly totals above $30 billion seen late last year. Year-to-date customs receipts still reached $166.5 billion in the first half of fiscal 2026, nearly four times the $43.6 billion collected in the same period a year earlier. (reuters.com) (newsbreak.com) Plaintiffs say Section 122 was written for a different era and cannot be stretched to cover today’s trade gap. Some judges also focused on that point, asking what the statute means now that the United States no longer operates under the old monetary system that existed when Congress passed the law in 1974. (bloomberg.com) (axios.com) (reuters.com) The administration argues the law still gives the president room to act. In its February proclamation, the White House said senior officials had determined that the United States faced “large and serious” balance-of-payments deficits and that import restrictions were required. (whitehouse.gov) (federalregister.gov) The refund risk is hanging over the case because the government has already been forced to unwind earlier tariffs. Reporting on the March budget and the post-Supreme Court cleanup said businesses may seek repayment tied to roughly $166 billion in tariff collections that had been taken under the invalidated emergency-power regime. (reuters.com) (wikipedia.org) No ruling came from Friday’s hearing. Until the court decides, the 10 percent tariff remains in place, and the administration’s backup tariff plan is still being tested in court. (cit.uscourts.gov) (politico.com)