Court of International Trade voids Trump's 10% global tariff

Tariffs are back in court again — and the basic fight is now about whether the president can slap a broad import tax on almost everything without Congress. Last week, the U.S. Court of International Trade said no. It ruled that Donald Trump’s 10% global tariff, announced in February as a replacement for an earlier tariff program the Supreme Court had already knocked out, went beyond what the law allows. But the story did not end there. On May 12, the U.S. Court of Appeals for the Federal Circuit temporarily paused that ruling, which means the tariff stays in place while the appeal moves forward. ### What tariff are we even talking about? This is not the first Trump global tariff plan. The earlier one used the International Emergency Economic Powers Act, or IEEPA, and the Supreme Court rejected that route in February 2026. After that loss, the administration switched to Section 122 of the Trade Act of 1974 and imposed a temporary 10% duty on nearly all imports. That new version was supposed to be a backup plan, not a permanent system. (politico.com) It was also set to expire on July 24, 2026, unless Congress extended it. ### Why did the trade court strike it down? The trade court’s majority said Section 122 is narrower than the administration claimed. That law lets a president respond to certain balance-of-payments problems, but the judges said Congress had in mind a specific kind of external payments crisis — not the broad modern argument that America imports more goods than it exports. In plain English, the court said the administration grabbed an old, limited tool and tried to use it like a universal tariff button. (cnbc.com) The panel called the proclamation invalid and the tariffs unauthorized by law. ### Was the ruling a total shutdown? Not quite. This is the catch. The Court of International Trade did not issue a nationwide block for every importer in America. It granted relief to the parties that actually sued — two importer groups and the state of Washington. So even before the appeal stepped in, the immediate legal effect was narrower than the headline made it sound. That matters because tariff cases are now colliding with the Supreme Court’s recent skepticism of broad universal injunctions. (supplychaindive.com) ### Why did the appeals court pause it? The Federal Circuit’s May 12 order was an administrative stay — basically a short legal timeout, not a final endorsement of Trump’s position. The government argued that refunding tariffs now and then trying to claw the money back later would be messy or impossible. The appeals court gave both sides a briefing schedule and froze the lower-court order while it decides whether a longer stay should remain in place during the appeal. (cnbc.com) So for now, Customs can keep collecting the 10% duty. ### Why does Section 122 matter so much? Because it was Trump’s Plan B. After the Supreme Court took away the emergency-powers route, Section 122 became the administration’s main surviving legal basis for a broad across-the-board tariff. If that path fails too, the White House has to fall back on slower, narrower trade laws — like Section 301 or Section 232 — that usually require investigations, findings, and product-specific justifications. (usnews.com) That weakens the president’s ability to use one fast blanket tariff as negotiating leverage. ### Who could get money back? Potentially, importers that paid these duties — but only if the tariffs are ultimately held unlawful and the courts allow refunds beyond the current plaintiffs. That is still unsettled. The legal fight is no longer just about whether the tariff was valid. It is also about scope — who benefits, when refunds happen, and whether a court can stop collection broadly or only for the companies that sued. (cnbc.com) ### So what matters next? Watch the Federal Circuit. The next real question is whether the court turns this temporary pause into a longer stay, and then what it says on the merits. If the administration loses again, it is another big hit to the idea that the president can build a near-universal tariff wall by repurposing old statutes. If it wins, Section 122 becomes a much more powerful weapon than most trade lawyers thought it was. (dorsey.com) ### Bottom line The clean version is this: the trade court said Trump’s backup 10% global tariff was illegal, but the appeals court has put that loss on hold for now. So the policy is legally wounded, not dead. And the bigger fight — who controls broad tariff power in the U.S., Congress or the president — is still very much alive. (politico.com) (abcnews.com)