The US Court of International Trade has ruled that the 10 percent global tariff imposed by President Donald Trump under Section 122 of the Trade Act of 1974 was unlawful, marking another major legal setback for the administration’s trade policy.
The tariff was introduced in February 2026 after the US Supreme Court struck down a previous tariff regime imposed under the International Emergency Economic Powers Act (IEEPA). Trump then invoked Section 122, a rarely used provision that allows temporary import surcharges of up to 15 percent for 150 days to address balance-of-payments deficits.
In its ruling, the court rejected the administration’s argument that a trade deficit could be interpreted as a balance-of-payments deficit. The majority opinion stated that such an interpretation would effectively grant the executive branch unlimited tariff authority, which constitutionally belongs to Congress.
The injunction currently applies only to the plaintiffs, including two small businesses and the State of Washington, while tariff collections continue for most other importers.
The US Department of Justice filed an appeal on May 8, 2026 with the US Court of Appeals for the Federal Circuit.
The ruling does not affect Section 232 tariffs on steel and aluminum, which remain in force under national security provisions.
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