New York: A split three-judge panel of the Court of International Trade in New York ruled 2-1 that the Trump administration’s temporary 10% global tariffs were illegal, saying the president had exceeded the tariff authority granted by Congress under federal law. The majority opinion described the tariffs as “invalid” and “unauthorised by law.” The third judge on the panel dissented, arguing that the law gave the president broader authority to impose tariffs.
The case focused on the temporary 10 per cent worldwide tariffs imposed by the Trump administration after the Supreme Court, in February, struck down broader double-digit tariffs that Trump had earlier imposed on nearly every country. The administration relied on Section 122 of the Trade Act of 1974 to introduce the revised tariffs, which were scheduled to remain in force until July 24.
The legal challenge was brought by small businesses affected by the tariffs. The ruling directly halted 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 was still unclear whether businesses beyond the named plaintiffs 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 judgment.
Supreme Court battle continues
The ruling marked another legal setback for the Trump administration’s tariff strategy. Last year, Trump invoked the International Emergency Economic Powers Act (IEEPA) of 1977 and declared the long-running US trade deficit a national emergency in order to justify sweeping global tariffs. However, the Supreme Court ruled on February 28 that the IEEPA did not authorise those tariffs. Under the US Constitution, Congress holds the authority to establish taxes and tariffs, although lawmakers may 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 before 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 begun examining 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 harming American manufacturers by driving down prices. It is also reviewing whether 60 economies, ranging from Nigeria to Norway and together accounting for 99% of US imports, are doing enough to prevent trade in goods produced through forced labour.
