Federal court hears tariff challenge

A federal trade court spent more than three hours on April 10 testing whether President Donald Trump can keep a 10% tariff on nearly all imports in place until July without Congress. (opb.org) The hearing was before a three-judge panel of the United States Court of International Trade in New York. Oregon is leading the case with 23 other states, and two businesses, Basic Fun and Burlap and Barrel, also challenged the tariffs. (opb.org) (abcnews.com) Trump imposed the tariffs on February 24 under Section 122 of the Trade Act of 1974, four days after the Supreme Court struck down his broader tariff program under the International Emergency Economic Powers Act on February 20. Section 122 lets a president impose tariffs of up to 15% for 150 days unless Congress extends them. (nbcnews.com) (opb.org) (law.cornell.edu) The fight turned on an old trade-law phrase: “balance-of-payments deficits.” State lawyers told the court that phrase referred to a 1970s currency-and-gold problem, not the routine gap between what the United States imports and exports. (politico.com) (nbcnews.com) (law.cornell.edu) Government lawyers argued that today’s trade deficit can still count as a balance-of-payments deficit under Section 122. The judges pressed both sides on how a statute written in 1974 should apply in 2026, with Judge Timothy Stanceu saying the panel was “not quite sure how to translate 1974 into 2026.” (politico.com) (reason.com) The case reaches beyond this 10% duty because the White House has treated Section 122 as a stopgap after losing at the Supreme Court. Politico reported the administration intends to use the temporary tariffs as a bridge while it pursues other legal paths for longer-lasting import duties. (politico.com) The states say the tariffs will raise costs for governments, businesses and consumers, and Oregon’s complaint says Congress, not the president, controls tariff policy. The Oregon Department of Justice says Section 122 authorizes only limited tariffs tied to balance-of-payments deficits, not trade deficits. (opb.org) (doj.state.or.us) The administration says the tariffs are needed to address “fundamental international payment problems” and to rebalance trade. In a February fact sheet, the White House said the proclamation was meant to benefit American workers, farmers and manufacturers. (whitehouse.gov) The judges also questioned whether the states have standing, or a direct enough injury to sue, while sounding more open to the claims from the two import-dependent businesses. No ruling came from the bench, and the tariffs are scheduled to expire on July 24 unless Congress acts first. (abcnews.com) (opb.org)