Court hears challenge to global 10% tariff

A court in New York spent more than three hours on April 10 asking whether the White House found a real legal back door after the Supreme Court knocked out its broader tariff plan in February. The judges on the United States Court of International Trade were reviewing a 10 percent import tax that now applies to goods from almost every country. (politico.com) (pbs.org) The administration imposed that tariff on February 20, 2026 under Section 122 of the Trade Act of 1974, and Customs began collecting it on February 24. Section 122 lets a president add a temporary import surcharge of up to 15 percent for up to 150 days without new approval from Congress. (whitehouse.gov) (content.govdelivery.com) (law.cornell.edu) That law was written for a specific kind of emergency: a “balance-of-payments” problem, which is basically a country running into trouble settling what it owes the rest of the world. The statute ties that power to a “large and serious” payments deficit or a threatened drop in the dollar, not to a general complaint that imports are too high. (law.cornell.edu) (reason.com) The plaintiffs say that is the whole case. Twenty-four states and two companies, Burlap and Barrel and Basic Fun, argue that the United States does not face the kind of payments crisis Section 122 was built for, so the president cannot use it as a catch-all tariff switch. (reuters.com) (spectrumlocalnews.com) (reason.com) The White House is in this position because the Supreme Court had already struck down the administration’s earlier tariffs that relied on the International Emergency Economic Powers Act, a separate emergency law. After that February ruling, the president moved almost immediately to Section 122 and announced a new global tariff at a lower 10 percent rate. (pbs.org) (reason.com) What made Friday’s hearing stand out was not a final ruling but the judges’ questions. Multiple reports said the panel sounded skeptical that a law aimed at old-style currency stress could justify a near-universal tariff in today’s floating-exchange-rate system. (politico.com) (reason.com) One fight inside the courtroom was over history. Lawyers challenging the tariff argued Section 122 was drafted in the final years of the Bretton Woods system, when governments were still trying to hold currencies to fixed values, and that is why the law talks in the language of payments crises and dollar depreciation. (reason.com) (govinfo.gov) There is also a clock running on the policy itself. Section 122 caps a president’s unilateral tariff at 150 days unless Congress extends it, and trade lawyers say that puts the current measure on a path toward a late-July deadline if nothing changes. (law.cornell.edu) (fleischer-chb.com) That legal uncertainty is now spilling into ordinary business decisions. Companies buying hardware or planning hiring have to price in the risk that the tariff could stay, rise toward 15 percent, or vanish after a court order, and that kind of moving target tends to slow approvals first at the junior end of the labor market. (finance-commerce.com) (fleischer-chb.com) So the case is about more than one 10 percent charge at the border. It is turning into a test of whether a president can keep reaching for narrow trade statutes after courts reject broader claims of emergency power. (politico.com) (pbs.org)