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A federal court has ruled against President Donald Trump’s latest attempt to revive broad tariffs, delivering another legal setback to one of the central pillars of his economic agenda.
On Thursday, the U.S. Court of International Trade concluded that Trump unlawfully used Section 122 of the Trade Act of 1974 to impose a 10% global tariff after the Supreme Court earlier struck down his wider tariff program.
The decision came from a divided three-judge panel, with Judges Mark Barnett and Claire Kelly siding against the administration. Judge Timothy Stanceu dissented.
Court Says Trump Misused Section 122
After his original tariff strategy ran into legal trouble, Trump’s administration turned to Section 122 as an alternative method to continue imposing import duties.
The law allows a president to temporarily impose tariffs of up to 15% for no more than 150 days during serious international payment problems or major balance-of-payments crises. But the court ruled that the administration’s justification did not meet the legal requirements laid out in the statute.
In the majority opinion, the judges wrote:
“Trump’s February proclamation imposing the new tariffs is invalid, and the tariffs imposed on Plaintiffs are unauthorized by law.”
The ruling argued that the administration stretched the Nixon-era law beyond its intended purpose.
Why the Ruling Matters
Although the court stopped short of blocking the tariffs nationwide, the ruling could still have major consequences.
The injunction only applies to the specific plaintiffs involved in the case:
The judges determined that other states and businesses involved in the broader lawsuit did not have legal standing.
Still, legal analysts say the decision creates a strong precedent that could encourage more businesses to challenge the tariffs in court.
Businesses Celebrate the Decision
The companies involved in the lawsuit quickly celebrated the ruling, saying the tariffs created financial uncertainty and disrupted global supply chains.
Basic Fun! CEO Jay Foreman called it: “An important win for American companies that rely on global manufacturing.” Burlap & Barrel co-founders Ethan Frisch and Ori Zohar described the ruling as: “A major victory for small businesses like ours.”