Court hears new tariff challenge

A federal trade court in New York is weighing whether President Donald Trump’s new 10 percent tariff on most imports can stay in place after judges heard arguments on Friday. (cit.uscourts.gov) (pbs.org) The case was argued on April 11 before a three-judge panel of the United States Court of International Trade, and the plaintiffs include 24 mostly Democratic-led states and two small businesses. The tariffs took effect on February 24. (reuters.com) (cit.uscourts.gov) The administration imposed the new duties under Section 122 of the Trade Act of 1974, a law that lets a president add a temporary import surcharge of as much as 15 percent for up to 150 days. Customs and Border Protection said Trump’s February 20 proclamation set the rate at 10 percent on imported articles from every country unless exempted. (law.cornell.edu) (content.govdelivery.com) (federalregister.gov) The legal fight centers on a narrow phrase with broad consequences: whether the United States has the kind of “large and serious” balance-of-payments problem that Section 122 was written to address. Judges pressed both sides on what that phrase means and whether a long-running trade deficit fits it. (axios.com) (reuters.com) This dispute exists because the Supreme Court shut down Trump’s earlier tariff strategy on February 20. In *Learning Resources, Inc. v. Trump*, the court ruled 6-3 that the International Emergency Economic Powers Act does not authorize the president to impose tariffs. (supremecourt.gov) (congress.gov) Within hours of that ruling, Trump switched to Section 122 and framed the move as a response to “fundamental international payments problems.” The White House and Federal Register notices said senior officials had advised him that special import measures were required to address large United States balance-of-payments deficits. (whitehouse.gov) (federalregister.gov) The states and businesses say that switch was an end run around the Supreme Court and around Congress’s taxing power. Reuters reported that they argued Section 122 was designed for short-term currency or payments emergencies, not for a structural trade gap that has existed for years. (reuters.com) (congress.gov) The administration answered that Congress wrote Section 122 broadly enough to let the president act quickly, and White House spokesperson Kush Desai said Trump was “lawfully using the executive powers granted to him by Congress” to address a balance-of-payments crisis. (aljazeera.com) (whitehouse.gov) No ruling came from the bench on Friday. The next step is a written decision from the trade court on whether Trump’s fallback tariff plan survives the same judicial scrutiny that ended his first one. (politico.com) (pbs.org)