The Court of International Trade issued a ruling on Thursday declaring President Trump's newest 10% universal tariffs illegal under federal law. The tariffs, implemented under Section 122 of the Trade Act of 1974, were challenged by small businesses represented by the Liberty Justice Center, which previously succeeded in overturning Trump-era tariffs in the Supreme Court.
Background
President Trump invoked Section 122 in February after the Supreme Court invalidated the bulk of his earlier tariffs. The provision allows temporary tariffs of up to 15% for 150 days to address 'large and serious' balance-of-payments deficits. However, the court ruled that Trump's interpretation of the statute would grant him unlimited tariff authority, undermining congressional power.
"If the President can decide what counts as a balance-of-payments deficit, he can always find one," the court stated in its 2-1 decision.
Impact on American Workers
The ruling represents another legal challenge to Trump's trade agenda, which has prioritized tariffs as a tool to protect domestic industries. While the tariffs are set to expire in July, the administration has signaled plans to replace them with alternative measures. Critics argue that the tariffs disproportionately harm American small businesses and consumers, while proponents claim they level the playing field for domestic manufacturers.
Next Steps
The White House is expected to appeal the decision, with Section 301 investigations already underway as a potential alternative. The ongoing legal battles highlight the administration's reliance on tariffs as a cornerstone of its economic nationalist policies.