A federal trade court has rejected Donald Trump's attempt to impose blanket 10% tariffs across all imports, dealing a significant legal blow to the administration's tariff strategy just weeks after a separate Supreme Court ruling constrained his trade authority.
The US Court of International Trade ruled 2-1 on Thursday that the tariffs, which took effect February 24, lacked legal justification under the Trade Act of 1974. The decision came in response to a challenge filed by small business groups who argued the move circumvented an earlier Supreme Court decision that invalidated Trump's 2025 tariffs imposed under the International Emergency Economic Powers Act.
Trump had relied on Section 122 of the 1974 law to justify the tariffs, citing balance of payments deficits and threats to the dollar's stability as grounds for the 150-day duty window. The trade court found this rationale did not fit the statute's requirements. One judge dissented, contending the case was premature.
The ruling represents another setback for Trump's aggressive tariff agenda, which has formed a cornerstone of his economic policy. Courts have increasingly scrutinized the legal foundations of his trade actions, forcing the administration to invoke different statutory authorities after earlier attempts were blocked.
Meanwhile, Trump set a new confrontation with Europe in motion on Thursday, announcing a July 4 deadline for the European Union to implement previously agreed trade terms. If the EU fails to comply, he said tariffs on European vehicles would jump to 25% from the 15% rate announced last week.
The ultimatum follows a dispute over a trade agreement negotiated in Scotland last summer, which required the EU to eliminate tariffs on US industrial goods and provide duty-free quotas for American agricultural and seafood exports. The EU has struggled to move the necessary implementing legislation through its Parliament, sparking Trump's escalating threats.
Trump claimed on Truth Social that he discussed the deadline during a call with European Commission President Ursula von der Leyen, describing it as a constructive conversation. The two leaders also reportedly agreed on opposition to Iranian nuclear development.
The combination of the court defeat on global tariffs and the looming EU showdown underscores the legal constraints and diplomatic tensions surrounding Trump's trade strategy. The administration faces mounting pressure to restructure its tariff approach as courts continue to block broad-based actions.
Author James Rodriguez: "The court's decision exposes the weakness in Trump's legal theory here, but don't expect the tariff fight to end anytime soon; there's always another statute to invoke."
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