Trade Court Says Administration Misinterpreted Law
A federal trade court ruled Thursday that President Donald Trump acted unlawfully when imposing a 10% global tariff earlier this year.
In a 2-1 decision, the United States Court of International Trade said the Trump administration incorrectly interpreted Section 122 of the Trade Act of 1974 to justify the sweeping tariffs.
Second Major Legal Defeat for Tariff Policy
The ruling marks the second time Trump’s tariff strategy has faced a legal setback. Earlier this year, the Supreme Court of the United States upheld a separate decision blocking an earlier round of tariffs.
At the center of the case was the definition of “balance-of-payments deficits.” The administration argued the term was equivalent to a trade deficit, but the court disagreed.
“It is clear that Congress was aware of the differences in the words it chose,” the majority opinion stated.
Limited Immediate Impact
The court granted an injunction benefiting two small businesses and the state of Washington. However, judges dismissed claims from a larger coalition of states, ruling they lacked legal standing.
The judges noted that Congress defined “balance-of-payments deficits” differently when the law was written in 1974 and rejected the administration’s broader interpretation.
Trump’s 10% global tariff policy took effect in February and is currently scheduled to expire in late July unless extended or overturned through further legal action.
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