U.S. tariff legality tested

A U.S. trade court spent April 10 testing whether President Donald Trump’s 10% tariff on most imports is legal at all. (reuters.com) The case is before a three-judge panel of the U.S. Court of International Trade in New York. Plaintiffs include 24 mostly Democratic-led states and two small businesses challenging the tariff that took effect on February 24. (politico.com) Trump imposed the tariff under Section 122 of the Trade Act of 1974, a law that lets a president add duties of up to 15% for up to 150 days during a “large and serious” U.S. balance-of-payments deficit or to prevent a sharp dollar decline. The administration’s order set the surcharge at 10%. (usnews.com) (federalregister.gov) The legal fight started after the Supreme Court ruled on February 20, 2026, that the International Emergency Economic Powers Act does not authorize presidents to impose tariffs. Trump announced the new Section 122 tariff the same day, replacing the broader tariff program the court had just struck down. (ropesgray.com) (globaltradealert.org) The states and businesses told the court that Section 122 was written for currency and payments emergencies tied to the old Bretton Woods era, not for a standing U.S. goods trade gap. Their lawyers argued that using it for a global 10% import tax lets the White House sidestep Congress and the Supreme Court. (bloomberg.com) (reason.com) Justice Department lawyers defended the tariff as a lawful response to “fundamental international payments problems” and persistent trade deficits. During the hearing, judges pressed the government on whether a long-running trade deficit is enough to trigger a law written for more acute monetary stress. (federalregister.gov) (reuters.com) That legal question reaches beyond customs bills. Importers have been setting prices, ordering inventory, and planning supply contracts around a tariff that could be upheld, narrowed, or thrown out, with refund fights likely if the court rules against the government. (flexport.com) (washingtonpost.com) Oregon is among the lead states in the case, and Attorney General Dan Rayfield said after the hearing that “Congress sets tariffs, not the president.” The administration has not backed away from the policy and continues to frame the surcharge as part of its trade-deficit response. (opb.org) (federalregister.gov) No ruling came from the bench on April 10. Until the panel decides, the 10% tariff remains in force and the biggest question is whether Section 122 can carry a trade policy the Supreme Court already said could not rest on emergency powers. (reuters.com) (politico.com)