Court strikes down Trump’s new 10% tariffs in major blow

Federal judges rule White House overstepped legal authority

Donald Trump has suffered another major setback to his economic agenda after a federal trade court ruled his sweeping new 10% tariffs were illegal, throwing fresh uncertainty into America’s trade policy and global markets.

In a split 2-1 decision, judges at the US Court of International Trade found the Trump administration lacked the legal authority to impose the across-the-board import duties under Section 122 of the Trade Act of 1974.

The ruling represents the second major judicial blow this year against Trump’s tariff strategy after the US Supreme Court previously struck down an earlier round of broader levies.

Judges reject White House justification

The administration had argued the tariffs were necessary to address what it described as serious imbalances in US trade and payments.

But the court ruled the White House failed to meet the legal threshold required under the law.

The majority opinion stated the administration had not demonstrated the kind of “large and serious” balance-of-payments crisis Congress originally intended Section 122 to address.

That finding effectively undermined the legal foundation of Trump’s replacement tariff regime.

Refunds ordered for affected companies

The court ordered the administration to stop collecting the tariffs from the companies involved in the lawsuit and refund money already paid.

Although the ruling technically applies only to the plaintiffs for now, it creates a potentially devastating precedent that could trigger further legal challenges from importers across the United States.

The tariffs may temporarily remain in place for other businesses until July while appeals proceed.

Trump vows to keep fighting

Trump reacted defiantly to the ruling Thursday night, making clear he has no intention of backing away from tariffs as a core economic weapon.

“Nothing surprises me with the courts,” he told reporters.

“We always do it a different way. We get one ruling, and we do it a different way.”

The president has long portrayed tariffs as a key tool to protect American industry, punish foreign competitors, and pressure trading partners into concessions.

Tariff strategy increasingly boxed in

The legal defeats are steadily narrowing the administration’s available trade options.

After the Supreme Court earlier invalidated some of Trump’s most aggressive tariffs, the White House pivoted to Section 122 — a lesser-used emergency trade provision allowing presidents to impose temporary tariffs of up to 15% without congressional approval.

Now that strategy itself has been partially dismantled by the courts.

At present, the administration’s strongest surviving tariff powers appear to involve industry-specific measures targeting sectors such as steel, autos, and technology rather than blanket global levies.

Businesses face more uncertainty

The decision adds yet another layer of uncertainty for importers and manufacturers already struggling to navigate rapidly shifting trade rules.

Companies affected by previously overturned tariffs are now attempting to recover billions in payments through a refund process that remains only partially operational.

Businesses warn the stop-start legal battles are creating chaos for supply chains, pricing, contracts, and investment decisions.

Markets watching next move closely

The administration is widely expected to appeal the ruling, potentially setting up another high-stakes legal showdown over presidential trade powers.

For global markets, the case has become about far more than one tariff dispute. It now touches on how much unilateral economic authority an American president can wield without Congress.

And despite repeated courtroom setbacks, Trump’s comments suggest the White House is still determined to find new ways to keep tariffs at the centre of its economic strategy.

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