New York, May 8, 2026 — In a significant legal setback for President Donald Trump’s trade agenda, the U.S. Court of International Trade ruled on May 7 that his administration’s 10% across-the-board global tariffs are unlawful, declaring them “invalid” and “unauthorized by law.”
A divided three-judge panel issued the 2-1 decision, finding that the tariffs exceeded the president’s authority under Section 122 of the Trade Act of 1974. This provision allows for temporary tariffs — limited to 150 days — primarily to address serious balance-of-payments deficits or to prevent a sharp decline in the U.S. dollar. The court determined that the broad tariffs, imposed on most imports starting February 24, 2026, did not meet these statutory criteria.
Background and Context
The ruling marks the second major judicial defeat for Trump’s tariff strategy this year. In February 2026, the U.S. Supreme Court struck down earlier, more sweeping tariffs imposed under the International Emergency Economic Powers Act (IEEPA) in a 6-3 decision. Following that loss, the administration pivoted to Section 122 as a legal workaround, implementing the 10% global levy as a replacement measure aimed at promoting trade reciprocity and addressing trade imbalances.
Small businesses and the state of Washington were among the plaintiffs who challenged the tariffs, arguing they raised costs for importers without proper legal grounding. The court’s decision blocks collection of the duties specifically for these plaintiffs, but the ruling is narrow in scope. It does not immediately halt the tariffs for all importers nationwide, allowing them to remain in effect for others pending appeals.
Divided Panel and Dissent
The majority opinion emphasized Congress’s primary constitutional authority over tariffs, cautioning against expansive executive interpretations of trade statutes. One dissenting judge contended that the law grants the president broader leeway in such matters.
The tariffs are scheduled to expire in July 2026 regardless, but the administration is expected to appeal the decision, likely to the U.S. Court of Appeals for the Federal Circuit and potentially back to the Supreme Court.
Implications
This latest ruling reinforces judicial limits on presidential use of delegated trade powers for wide-ranging tariffs. Challengers, including importers and certain states, have welcomed the decision as a check on executive overreach that has contributed to higher costs in some sectors. The Trump administration has defended the measures as essential tools for national economic security.
Legal experts note that while the immediate impact is limited, the case adds to ongoing uncertainty in U.S. trade policy and could influence future efforts to reshape international commerce. Developments are likely to unfold rapidly as appeals proceed.
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