U.S. Court of International Trade Rules Trump’s 10% Tariff Unlawful

On May 7, 2026, the U.S. Court of International Trade in New York ruled that President Donald Trump’s 10% global tariff, imposed under Section 122 of the Trade Act of 1974, was unlawful. The decision was made by a split three-judge panel, with a 2-1 vote, determining that the president exceeded the tariff authority granted by Congress ^[1][2].

The majority opinion of the court found that the tariff proclamation did not adequately demonstrate a “balance-of-payments deficit” as required by law. This interpretation rejected the broader definition of the term proposed by the Trump administration ^[2][3].

The ruling currently applies only to the plaintiffs in the case, which include two small businesses and the state of Washington. It does not impose a universal injunction, meaning the tariffs may continue to be enforced on other importers while the administration pursues an appeal ^[3][4].

This decision follows a previous ruling by the U.S. Supreme Court on February 20, 2026, in the case of Learning Resources, Inc. v. Trump. The Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs, thereby invalidating earlier tariffs based on emergency powers ^[5][6].

In response to the Supreme Court’s decision, President Trump issued a new proclamation on February 24, 2026, implementing a 10% global tariff under Section 122 of the Trade Act of 1974. This tariff was set to expire after 150 days, on July 24, 2026 ^[7][8].

What Is Known

The U.S. Court of International Trade has ruled that the 10% global tariff imposed by President Trump is illegal due to overreach of executive power. The ruling is currently limited to the plaintiffs and does not affect other importers unless further legal action is taken ^[1][3].

What Remains Unclear

It remains uncertain whether the administration will attempt to adjust the tariff rate or pursue other legal avenues to maintain the tariffs. Reports suggest the possibility of raising the tariff rate to 15% under Section 122, but no official action has been confirmed ^[8].