Trade court hears challenge to tariffs

A federal court in lower Manhattan spent Friday on a question with a very short wording and a very long price tag: can the White House keep a 10% tax on imports from nearly every country after the Supreme Court already knocked out the administration’s earlier tariff plan in February. The hearing was in the United States Court of International Trade, the court that handles customs and trade fights. (usnews.com) (cit.uscourts.gov) The lawsuits came from 24 states and two small businesses, and they target the replacement tariff system the administration put in place after the Supreme Court’s February 20, 2026 ruling in Learning Resources v. Trump and Trump v. V.O.S. Selections. In that 6-3 decision, the Court said the International Emergency Economic Powers Act does not let a president impose tariffs. (usnews.com) (supremecourt.gov) (congress.gov) The new tariff does not rely on emergency-powers law. It relies on Section 122 of the Trade Act of 1974, a half-century-old statute that lets a president impose a temporary import surcharge of as much as 15% for as long as 150 days when there are what the law calls “fundamental international payments problems.” (whitehouse.gov) (law.cornell.edu) That 150-day clock is the whole fight in plain English. The administration says Section 122 is a lawful backup tool for a 10% across-the-board surcharge, while the states and businesses say the White House is trying to use a narrow temporary law as a substitute for a broader tariff power the Supreme Court just rejected. (kfgo.com) (carolinajournal.com) (justthenews.com) The timing is tight because the replacement tariffs took effect on February 24, 2026, and trade lawyers have treated July 24, 2026 as the end of the 150-day period unless Congress extends them. That means importers are making pricing and shipping decisions now around a policy that could expire on its own, be struck down by judges, or be extended by lawmakers. (usnews.com) (internationaltradeinsights.com) (law.cornell.edu) The court is not being asked to erase every tariff the administration has imposed. Reuters reported that these cases do not challenge other tariffs imposed under more traditional trade laws, including recent duties on steel, aluminum, and copper, so even a loss here would leave parts of the tariff wall standing. (arabnews.pk) (usnews.com) For buyers, a tariff works like a new tollbooth at the border: the tax is collected from the importer, and the importer then decides how much to absorb, how much to pass on, and what orders to delay. A flat 10% surcharge hits broad categories of goods at once, so schools, hospitals, universities, and city purchasing offices can feel it in bids for laptops, lab gear, maintenance hardware, and construction inputs even when they never import directly. (whitehouse.gov) (globaltradealert.org) That is why a hearing in a specialized trade court can spill into ordinary budget meetings. If the judges narrow or block the president’s Section 122 authority, some import contracts could be repriced, some procurement calendars could move, and some institutions that delayed purchases after February 24 could suddenly have a reason to speed them up before the next legal turn. (cit.uscourts.gov) (usnews.com)