Invalid, unauthorised by law: US court strikes down Trump's 10% global tariffs

A US trade court ruled that Donald Trump's temporary 10% global tariffs were unlawful. The decision deepens pressure on the administration's tariff strategy as an appeal looms.

In Short

• 2 judges call tariffs invalid, 1 dissents citing broader presidential power
• Ruling may prompt more companies to seek refunds, legal challenges
• Trump administration to appeal, explores new tariff measures

A split three-judge panel of the Court of International Trade in New York ruled 2-1 that the 10% global tariffs were illegal and said Trump had exceeded the tariff authority granted to the president by Congress under the law. The majority called the tariffs “invalid” and “unauthorised by law.”

The third judge on the panel disagreed and said the law gave the president broader authority on tariffs.

The case centred on temporary 10% worldwide tariffs that the Trump administration imposed after the Supreme Court in February struck down broader double-digit tariffs that Trump had earlier imposed on nearly every country. The administration invoked Section 122 of the Trade Act of 1974 to enforce the new tariffs, which were scheduled to expire on July 24.

Small businesses challenged the tariffs in court. The ruling directly blocked tariff collection from three plaintiffs, the state of Washington, spice company Burlap and Barrel, and toy company Basic Fun! Jeffrey Schwab, director of litigation at the Liberty Justice Centre, which represented the two companies, said it remained unclear whether other businesses would continue paying the tariffs.

“We fought back today, and we won, and we’re extremely excited,” Basic Fun! CEO Jay Foreman told reporters after the ruling.

The decision marked another legal setback for the Trump administration’s tariff policy. Last year, Trump invoked the 1977 International Emergency Economic Powers Act (IEEPA) and declared the long-running US trade deficit a national emergency to justify sweeping global tariffs.

However, the Supreme Court ruled on February 28 that IEEPA did not authorise those tariffs. The US Constitution gives Congress the authority to establish taxes and tariffs, although lawmakers can delegate limited tariff powers to the president.

Trade lawyer Dave Townsend of Dorsey & Whitney said the latest ruling could encourage more companies to seek refunds and challenge the tariffs in court. “Other importers likely will now ask for a broader remedy that applies to more companies,” Townsend said, while cautioning that the dispute could eventually return to the Supreme Court.

The Trump administration is expected to appeal Thursday’s ruling. The appeal would first go to the US Court of Appeals for the Federal Circuit in Washington and could later reach the Supreme Court.

Even as the legal battle continues, the administration has already started exploring alternative tariff measures. The Office of the US Trade Representative is investigating whether 16 trading partners, including China, the European Union and Japan, are overproducing goods and hurting American manufacturers by driving down prices.

It is also examining whether 60 economies, ranging from Nigeria to Norway and accounting for 99% of US imports, are doing enough to stop trade in goods produced through forced labour.

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