The U.S. Court of International Trade on Thursday blocked the 10% global tariffs that were instituted by President Donald Trump after the Supreme Court struck down his “Liberation Day” tariffs in February.
The order, handed down in a 2-1 majority ruling by a panel of judges, narrowly blocks the tariffs that apply to the plaintiffs. The tariffs will remain in place through July for all other importers not involved in the litigation.
The federal court determined the Trump administration lacked the legal standing to impose tariffs under the Trade Act. In the 1974 law, Section 122 permits tariffs up to 15% for 150 days. The import taxes expire on July 24.
On Feb. 20, the Supreme Court deemed tariffs enacted under the International Emergency Economic Powers Act to be illegal. The decision prompted Trump to invoke the Trade Act for his new 10% tariffs.
At the time, Trump threatened to increase the tariff rate to 15%. However, in practice, the new rate was 10%.
It remains to be seen how Trump responds to the latest tariff ruling. An appeal is likely in order.
A coalition of small businesses, represented by the Liberty Justice Center, sued the administration over the 10% tariffs more than two weeks after the landmark Supreme Court ruling. The law firm celebrated Thursday’s decision issued by the U.S. Court of International Trade.
“The United States has a trade deficit, not a balance-of-payments deficit, and does not have international payments problems,” senior counsel Jeffrey Schwab said in a statement. “The President cannot impose these tariffs under Section 122.”
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Burlap and Barrel, the primary plaintiff in the lawsuit, also touted its legal victory.
“These tariffs created real challenges for our company and for the farmers we partner with around the world,” said Ethan Frisch and Ori Zohar, co-founders of the spice company. “Today’s decision helps ensure that businesses like ours are not unfairly burdened by unlawful trade restrictions.”
