A federal trade court on Thursday invalidated President Trump’s attempt to impose a global tariff of 10% after he faced a loss at the Supreme Court over a separate set of broad levies.
A three-judge panel at the Court of International Trade ruled, 2 to 1, in favor of businesses that sued over Mr. Trump’s decision to impose new tariffs under Section 122 of the Trade Act of 1974.
The court said the levies are “invalid, and the tariffs imposed on plaintiffs are unauthorized by law.”
The plaintiffs said Section 122 was misapplied because the law was designed to address “balance of payment” issues, such as currency imbalances and other economic issues, rather than to resolve a trade deficit, as Mr. Trump envisioned.
“Rather than identifying ‘balance-of-payments deficits’ as that term was intended in 1974, the proclamation [by Mr. Trump] relies upon current account deficits, and a discussion of ‘a large and serious trade deficit,” the court wrote.
The ruling, if upheld on appeal, would be another setback for Mr. Trump’s trade agenda after the Supreme Court in February said the administration erred by invoking the International Emergency Economic Powers Act to impose nation-by-nation tariffs last year.
Mr. Trump imposed new tariffs, which are duties on imported goods, under Section 122 to temporarily backfill those earlier tariffs while he conducts investigations that can impose sector-based levies on foreign goods.
Mr. Trump says tariffs are a great way to protect American jobs, create revenue and gain leverage over other nations.
Small businesses and other critics say the tariffs are effectively a new tax on American entities that pay the tariff to U.S. customs, and consumers who face higher prices as a result.
“Once again, a federal court has confirmed what we already knew: Trump’s tariffs are an illegal tax on hardworking Americans,” said Rep. Brendan Boyle, Pennsylvania Democrat and ranking member on the House Budget Committee.
The Washington Times reached out to the White House for comment on the latest ruling.
Even before the high court weighed in, Mr. Trump had been using Section 232 tariffs to rebuild manufacturing in key sectors, including steel, aluminum, copper, lumber, automobiles and trucks.
Mr. Trump may have to lean into those authorities even more to backfill his tariff framework if he faces a second defeat in the courts.
