On Friday, the U.S. administration moved to overturn a federal trade court ruling that dealt another legal setback to President Donald Trump's global tariff agenda by challenging the legal basis for his 10% import duties.
The ruling marks the second major judicial rebuke to Trump's tariff policies in the last few months. In February, the Supreme Court struck down Trump's earlier sweeping tariffs, ruling he lacked authority under the International Emergency Economic Powers Act. Following that defeat, Trump invoked Section 122 as an alternative legal mechanism, imposing replacement tariffs set to expire July 24 unless Congress approves an extension.
Trump sharply criticized the latest ruling, blaming "two radical left judges" for the decision.
The U.S. Court of International Trade ruled Thursday in a 2-1 decision that Section 122 of the Trade Act of 1974 was not intended to address persistent trade deficits, undercutting Trump's justification for imposing broad 10% tariffs on nearly all imports earlier this year. The court found that the statute was designed for temporary balance-of-payments emergencies rather than as a tool to restructure long-term trade imbalances.
However, the decision only blocks the tariffs for the specific plaintiffs in the case — two small businesses and the state of Washington.
The legal fight could have significant financial consequences, potentially opening the door to billions of dollars in tariff refund claims if broader challenges succeed. The decision also arrives just days before Trump is expected to meet Chinese President Xi Jinping in Beijing, adding new uncertainty to already tense U.S.-China trade negotiations.
