U.S. Trade Court Rules Against 10% Global Tariff on Narrow Grounds

The Court of International Trade sided with 24 states and businesses that filed a lawsuit challenging the legality of a 10% global tariff imposed in February under Section 122 of the Trade Act of 1974. In a ruling by a three-judge panel, the court found that the temporary tariffs were unlawful and harmful to businesses.

The decision applies only to a narrow subset of the plaintiffs: two businesses and the state of Washington. A White House spokesman defended the use of tariffs. "President Trump has lawfully used the tariff authorities granted to him by Congress to address our balance of payments crisis," the spokesman said in a statement.

The administration is reviewing legal options and maintains confidence in ultimately prevailing.

The ruling follows a February Supreme Court decision that struck down tariffs imposed under the International Emergency Economic Powers Act. The U.S. government owes importers an estimated $175 billion in tariff refunds plus interest because of that earlier ruling.

U.S. Customs and Border Protection has launched a portal where importers can submit refund claims. Officials have said tariffs are an important tool for ensuring fair trade relations, defending critical industries and raising federal revenue.

The narrow scope of the latest ruling means most U.S. businesses must continue paying the 10% tariff on most imported goods. Trade policy experts said that for practical purposes nothing changes immediately for the majority of importers. One trade attorney noted that because the ruling does not universally strike down the tariff, more businesses could file suit to avoid paying duties and seek refunds if it becomes economical to do so.

Importers were advised to track duties paid in case they become eligible for refunds later.

122 of the Trade Act of 1974 permits only a temporary 10% duty for 150 days. The measure was intended as a stopgap rather than a permanent policy. The tariffs are due to expire at the end of July. In March the administration announced investigations into foreign nations' trade practices under Section 301 of the Trade Act of 1974.

That law requires an investigation before tariffs or other restrictions can be imposed. Trade experts said the administration is most likely to rely on Section 301 measures going forward. The latest court decision could open the door to legal challenges against tariffs imposed under Section 301.

The average effective U.S. tariff rate on imports stands at 7.2%.