A US trade court has ruled that President Donald Trump’s temporary 10% global tariffs were unlawful, dealing another setback to the administration’s trade strategy. A split three-judge panel of the Court of International Trade in New York ruled 2-1 that the tariffs exceeded the powers granted to the president by Congress. The majority described the tariffs as “invalid” and “unauthorised by law.” However, the third judge dissented, arguing that the law provided the president with broader authority over tariff measures. The ruling has intensified legal and political pressure on the administration’s trade policy. An appeal against the decision is expected soon.
The case focused on temporary worldwide tariffs imposed after the Supreme Court struck down broader double-digit tariffs introduced earlier against nearly every country. Following that setback, the administration relied on Section 122 of the Trade Act of 1974 to impose the revised 10% tariffs, which were due to remain in force until July 24. Small businesses challenged the move in court, arguing that the president had exceeded constitutional and statutory limits. The ruling directly blocked tariff collection from three plaintiffs — Washington state, spice company Burlap and Barrel, and toy company Basic Fun! The court’s decision has created uncertainty over whether other importers will also be exempt from paying the tariffs. Legal experts say the judgment could trigger wider refund claims and fresh litigation.
Reacting to the verdict, Basic Fun! CEO Jay Foreman welcomed the outcome and said the companies were “extremely excited” by the ruling. Jeffrey Schwab, litigation director at the Liberty Justice Centre, which represented the businesses, said it was still unclear whether the decision would immediately apply beyond the named plaintiffs. The case marks another major challenge to the administration’s broader tariff agenda. Last year, Trump invoked the International Emergency Economic Powers Act (IEEPA) and declared the US trade deficit a national emergency to justify sweeping tariffs. However, the Supreme Court ruled earlier this year that the IEEPA did not authorise such broad tariff actions. The Constitution grants Congress the primary authority to impose taxes and tariffs, though limited powers may be delegated to the executive branch.
Trade experts believe the ruling could encourage more companies to challenge existing tariffs and seek refunds for duties already paid. Trade lawyer Dave Townsend said other importers may now pursue broader remedies extending beyond the current plaintiffs. He also cautioned that the dispute could eventually return to the Supreme Court due to its constitutional implications. The Trump administration is expected to appeal the ruling before the US Court of Appeals for the Federal Circuit in Washington. Depending on the outcome there, the case could once again reach the country’s highest court. The legal battle is likely to shape future debates over presidential authority in trade policy. It also raises fresh questions about the limits of executive powers during economic disputes.
Even as the court fight continues, the administration has already begun exploring alternative trade measures. The Office of the US Trade Representative is investigating whether 16 trading partners, including China, the European Union and Japan, are overproducing goods in ways that harm American manufacturers. Officials are also examining whether 60 economies are doing enough to prevent trade involving products allegedly linked to forced labour. These reviews could form the basis for future tariff actions or trade restrictions under different legal authorities. Analysts say the administration is attempting to preserve its broader protectionist agenda despite repeated court setbacks. The outcome of the appeal process may ultimately determine how far presidential tariff powers can extend without direct approval from Congress.
