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A three-judge panel at the Court of International Trade ruled 2-1 on Thursday that President Donald Trump's 10% global tariff, enacted under Section 122 of the Trade Act of 1974, is unlawful. This is the second time a Trump tariff regime has been found illegal by federal courts.

A three-judge panel at the Court of International Trade ruled 2-1 on Thursday that President Donald Trump's 10% global tariff, enacted under Section 122 of the Trade Act of 1974, is unlawful. This is the second time a Trump tariff regime has been found illegal by federal courts.

The court found that the administration misapplied Section 122, ruling that Trump's proclamation relied on trade deficit figures rather than "balance-of-payments deficits" as Congress defined the term in 1974. The White House said it would appeal and was confident it would ultimately prevail.

The court found that the administration misapplied Section 122, ruling that Trump's proclamation relied on trade deficit figures rather than "balance-of-payments deficits" as Congress defined the term in 1974. The White House said it would appeal and was confident it would ultimately prevail.

The ruling ordered a halt to tariff collection and refunds for the plaintiffs — two small businesses and the state of Washington. A refund process for roughly $166 billion collected under Trump's prior tariffs is already underway, with first payments expected soon.

The ruling ordered a halt to tariff collection and refunds for the plaintiffs — two small businesses and the state of Washington. A refund process for roughly $166 billion collected under Trump's prior tariffs is already underway, with first payments expected soon.

Trump responded to the ruling by telling reporters his administration would pursue tariffs through other legal avenues, including Section 301 investigations already underway.

Trump responded to the ruling by telling reporters his administration would pursue tariffs through other legal avenues, including Section 301 investigations already underway.

The Section 122 tariffs were temporary by statute, capped at 15% and 150 days, and were set to expire in late July. The administration had already been developing longer-term tariffs under Section 301 and Section 232 as replacements.

The Section 122 tariffs were temporary by statute, capped at 15% and 150 days, and were set to expire in late July. The administration had already been developing longer-term tariffs under Section 301 and Section 232 as replacements.

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A three-judge panel at the Court of International Trade ruled 2-1 on Thursday that President Trump's 10% global tariff, enacted under Section 122 of the Trade Act of 1974, is unlawful, marking the second time a Trump tariff regime has been found illegal by federal courts.

A three-judge panel at the Court of International Trade ruled 2-1 on Thursday that President Trump's 10% global tariff, enacted under Section 122 of the Trade Act of 1974, is unlawful, marking the second time a Trump tariff regime has been found illegal by federal courts.

The court found the administration misapplied Section 122, ruling that Trump's proclamation relied on trade deficit figures rather than "balance-of-payments deficits" as Congress defined the term in 1974. The White House said it would appeal and was confident it would ultimately prevail.

The court found the administration misapplied Section 122, ruling that Trump's proclamation relied on trade deficit figures rather than "balance-of-payments deficits" as Congress defined the term in 1974. The White House said it would appeal and was confident it would ultimately prevail.

Trump responded to the ruling by telling reporters, "We get one ruling, and we do it a different way," signaling his administration would pursue tariffs through other legal avenues, including Section 301 investigations already underway.

Trump responded to the ruling by telling reporters, "We get one ruling, and we do it a different way," signaling his administration would pursue tariffs through other legal avenues, including Section 301 investigations already underway.

Jeffrey Schwab of the Liberty Justice Center, which represented the small businesses that brought the case, said Section 122 "was passed in response to a specific historical crisis" involving currency and gold reserves — conditions he said do not currently exist.

Jeffrey Schwab of the Liberty Justice Center, which represented the small businesses that brought the case, said Section 122 "was passed in response to a specific historical crisis" involving currency and gold reserves — conditions he said do not currently exist.

The U.S. Court of International Trade ruled Trump's Section 122 tariffs unlawful, and that ruling is a win for small businesses crushed by illegal trade policy. The Constitution gives Congress — not the president — the power to tax, and no amount of executive creativity changes that. Rebranding a trade deficit as a balance-of-payments crisis to justify sweeping import taxes is exactly the kind of overreach the courts exist to stop.

The U.S. Court of International Trade ruled Trump's Section 122 tariffs unlawful, and that ruling is a win for small businesses crushed by illegal trade policy. The Constitution gives Congress — not the president — the power to tax, and no amount of executive creativity changes that. Rebranding a trade deficit as a balance-of-payments crisis to justify sweeping import taxes is exactly the kind of overreach the courts exist to stop.

Melanie Stansbury

The CIT ruling is a judicial stretch — the chief judge sided with the administration, and the two-judge majority essentially declared a valid law unusable, which isn't how legal interpretation works. Section 122 was enacted precisely to give the president tariff authority, and courts shouldn't rewrite statutes based on whether they think the economic conditions that inspired them still exist. An appeal will correct this flawed reasoning.

The CIT ruling is a judicial stretch — the chief judge sided with the administration, and the two-judge majority essentially declared a valid law unusable, which isn't how legal interpretation works. Section 122 was enacted precisely to give the president tariff authority, and courts shouldn't rewrite statutes based on whether they think the economic conditions that inspired them still exist. An appeal will correct this flawed reasoning.

Court Rules Trump's 10% Global Tariff Unlawful

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This ruling is a win for small businesses crushed by illegal trade policy. The Constitution gives Congress — not the president — the power to tax, and no amount of executive creativity changes that. Rebranding a trade deficit as a balance-of-payments crisis to justify sweeping import taxes is exactly the kind of illegal overreach the courts exist to stop.

This ruling is a win for small businesses crushed by illegal trade policy. The Constitution gives Congress — not the president — the power to tax, and no amount of executive creativity changes that. Rebranding a trade deficit as a balance-of-payments crisis to justify sweeping import taxes is exactly the kind of illegal overreach the courts exist to stop.

This is a judicial stretch. The chief judge sided with the administration, and the two-judge majority essentially declared a valid law unusable, which isn't how legal interpretation works. Section 122 was enacted to give the president tariff authority, and courts shouldn't rewrite statutes based on whether they think the economic conditions that inspired them still exist.

This is a judicial stretch. The chief judge sided with the administration, and the two-judge majority essentially declared a valid law unusable, which isn't how legal interpretation works. Section 122 was enacted to give the president tariff authority, and courts shouldn't rewrite statutes based on whether they think the economic conditions that inspired them still exist.

There's a 50% chance that the effective U.S. tariff rate on goods being imported into the United States will be 8.8% at the end of 2026, according to the Metaculus prediction community.

There's a 50% chance that the effective U.S. tariff rate on goods being imported into the United States will be 8.8% at the end of 2026, according to the Metaculus prediction community.

Anna Barclay/Getty Images

Anna Barclay/Getty Images

Court Rules Trump's 10% Global Tariff Unlawful

Court Rules Trump's 10% Global Tariff Unlawful

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Court Rules Trump's 10% Global Tariff Unlawful

Court Rules Trump's 10% Global Tariff Unlawful

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