A federal trade court dealt the Trump administration another legal blow on Thursday, ruling that the president's sweeping 10 percent universal tariffs violated the law. The decision, however, comes with a significant catch: the duties will remain in effect while the White House appeals, and they expire on their own in July anyway.
The Court of International Trade found that Trump's invocation of Section 122 of the Trade Act of 1974 overreached presidential authority. The provision, never used before, allows a president to impose temporary tariffs up to 15 percent for up to 150 days to address what the law calls "large and serious" balance-of-payments deficits.
The ruling targeted tariffs Trump imposed in February, the same day the Supreme Court struck down much of his earlier tariff regime. Those duties were set to automatically expire on July 24, making the legal victory potentially moot for administration opponents.
Small business plaintiffs represented by the Liberty Justice Center brought the challenge. A spice company and toy retailer argued the tariffs hurt their operations. The Liberty Justice Center, notably, had won the previous successful Supreme Court challenge to Trump's trade policy.
The court's 2-1 decision focused on statutory interpretation. If the president can pick and choose which economic measures count as a balance-of-payments deficit, the majority reasoned, he could essentially always find grounds to trigger the law. "Unless every sub-account is balanced, the President would always be able to identify a balance-of-payments deficit," the court wrote, noting this would grant unlimited tariff power that belongs to Congress.
Defining the crisis was central to the case. The administration argued that the broad current account deficit, which measures what America pays globally versus what it receives, represents the modern equivalent of what Congress intended. Plaintiffs countered that the monetary crisis the law targeted has not existed since the U.S. abandoned the gold standard in the 1970s.
The court tossed claims from 23 of 24 state attorneys general, finding their injuries from the tariffs too indirect to give them legal standing to sue.
An appeal is certain. Tim Brightbill, co-chair of international trade at the law firm Wiley Rein, told reporters that a "plan C" already exists: Section 301 investigations the administration is conducting. These investigations could provide a different legal hook for imposing tariffs before the current ones expire.
This marks the latest court rejection of Trump's tariff authority. Yet the practical impact may be limited. Officials have signaled that replacement tariffs will likely go into effect before July, keeping high duties on imports regardless of this ruling's outcome.
Author James Rodriguez: "The administration has found a pattern: lose in court, appeal, and implement the policy anyway through another legal mechanism. Until courts can actually stop the tariffs from taking effect, these rulings are theater."
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