‘Unauthorised by law’: US court rules Trump’s 10% tariffs illegal
The split three-judge panel said the 10% worldwide tariffs were “invalid” and “unauthorised by law”, finding that Trump had exceeded the tariff authority granted to the president by Congress under Section 122.
- May 8, 2026,
- Updated May 8, 2026 8:23 AM IST
A US trade court has ruled that President Donald Trump’s temporary 10% global tariffs are illegal, handing his tariff strategy another setback months after the US Supreme Court struck down broader duties he had imposed under a national emergencies law. The court said Trump had wrongly used Section 122 of the Trade Act of 1974 to impose the levies.
The split three-judge panel said the 10% worldwide tariffs were “invalid” and “unauthorised by law”, finding that Trump had exceeded the tariff authority granted to the president by Congress under Section 122. The third judge dissented and said the law gave the president broader authority on tariffs. One judge also said it was premature to grant final victory to the plaintiffs.
The court declined to issue a universal injunction that would have blocked the tariffs for all importers. It rejected a request from 24 states, most of them led by Democrats, saying they did not have standing to seek that relief. The ruling said: “Private plaintiffs make no specific arguments for a universal injunction. Costs to one plaintiff is not an appropriate basis for the imposition of a universal injunction. Accordingly, the court declines to enter a universal injunction.”
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The court found that most of the states that sued, apart from Washington, were not importers that had paid or could have paid the Section 122 tariffs. Washington submitted evidence that tariffs had been paid through the University of Washington, a public research institution.
The 2-1 ruling by the New York-based Court of International Trade left the tariffs in place for most importers but blocked the levies for the three plaintiffs before the court: the state of Washington, toy company Basic Fun! and spice importer Burlap & Barrel. The tariffs are due to expire on July 24.
The case centred on the temporary 10% tariffs Trump imposed after the Supreme Court in February struck down broader double-digit tariffs that he had earlier imposed on nearly every country under the 1977 International Emergency Economic Powers Act. The small businesses argued the new tariffs were an attempt to sidestep that decision. Immediately after the Supreme Court ruling, Trump turned to Section 122, which allows duties of up to 15% for up to 150 days to correct serious balance-of-payments deficits or head off an imminent depreciation of the dollar.
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Thursday’s ruling found that Section 122 was not the right authority for the kind of trade deficits cited in Trump’s February order. The administration had argued that a serious balance-of-payments deficit existed in the form of a $1.2 trillion annual US goods trade deficit and a current account deficit equal to 4% of GDP. A number of economists had questioned that basis from the start. Gita Gopinath, former first deputy managing director of the International Monetary Fund, had told Reuters at the time: “We can all agree that the U.S. is not facing a balance-of-payments crisis, which is when countries experience an exorbitant increase in international borrowing costs and lose access to financial markets.”
Basic Fun! chief executive Jay Foreman welcomed the ruling. “We fought back today, and we won, and we’re extremely excited,” he told reporters. In a statement, he said: “This decision is an important win for American companies that rely on global manufacturing to deliver safe and affordable products. Unlawful tariffs make it harder for businesses like ours to compete and grow.” He added, “We are encouraged by the court’s recognition that these tariffs exceeded the President’s authority. This ruling brings needed clarity and stability for companies navigating global supply chains.”
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Jeffrey Schwab, director of litigation at Liberty Justice Centre, which represented the two companies, said it remained unclear how the ruling would play out if it applied only to the plaintiffs. He said that “of course brings up a lot of questions about how this will play out”. He also said other companies could likely file lawsuits to seek refunds, depending in part on whether the government appeals or lets the tariffs expire on July 24 as scheduled.
Trump blamed the decision on “two radical left judges”. Speaking to reporters after viewing a reflecting pool renovation project in Washington, he said: “So, nothing surprises me with the courts. Nothing surprises me. We get one ruling and we do it a different way.”
A US trade court has ruled that President Donald Trump’s temporary 10% global tariffs are illegal, handing his tariff strategy another setback months after the US Supreme Court struck down broader duties he had imposed under a national emergencies law. The court said Trump had wrongly used Section 122 of the Trade Act of 1974 to impose the levies.
The split three-judge panel said the 10% worldwide tariffs were “invalid” and “unauthorised by law”, finding that Trump had exceeded the tariff authority granted to the president by Congress under Section 122. The third judge dissented and said the law gave the president broader authority on tariffs. One judge also said it was premature to grant final victory to the plaintiffs.
The court declined to issue a universal injunction that would have blocked the tariffs for all importers. It rejected a request from 24 states, most of them led by Democrats, saying they did not have standing to seek that relief. The ruling said: “Private plaintiffs make no specific arguments for a universal injunction. Costs to one plaintiff is not an appropriate basis for the imposition of a universal injunction. Accordingly, the court declines to enter a universal injunction.”
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The court found that most of the states that sued, apart from Washington, were not importers that had paid or could have paid the Section 122 tariffs. Washington submitted evidence that tariffs had been paid through the University of Washington, a public research institution.
The 2-1 ruling by the New York-based Court of International Trade left the tariffs in place for most importers but blocked the levies for the three plaintiffs before the court: the state of Washington, toy company Basic Fun! and spice importer Burlap & Barrel. The tariffs are due to expire on July 24.
The case centred on the temporary 10% tariffs Trump imposed after the Supreme Court in February struck down broader double-digit tariffs that he had earlier imposed on nearly every country under the 1977 International Emergency Economic Powers Act. The small businesses argued the new tariffs were an attempt to sidestep that decision. Immediately after the Supreme Court ruling, Trump turned to Section 122, which allows duties of up to 15% for up to 150 days to correct serious balance-of-payments deficits or head off an imminent depreciation of the dollar.
DON'T MISS | $166 billion to 330,000 importers: Trump's illegal tariff refunds begin around May 11
Thursday’s ruling found that Section 122 was not the right authority for the kind of trade deficits cited in Trump’s February order. The administration had argued that a serious balance-of-payments deficit existed in the form of a $1.2 trillion annual US goods trade deficit and a current account deficit equal to 4% of GDP. A number of economists had questioned that basis from the start. Gita Gopinath, former first deputy managing director of the International Monetary Fund, had told Reuters at the time: “We can all agree that the U.S. is not facing a balance-of-payments crisis, which is when countries experience an exorbitant increase in international borrowing costs and lose access to financial markets.”
Basic Fun! chief executive Jay Foreman welcomed the ruling. “We fought back today, and we won, and we’re extremely excited,” he told reporters. In a statement, he said: “This decision is an important win for American companies that rely on global manufacturing to deliver safe and affordable products. Unlawful tariffs make it harder for businesses like ours to compete and grow.” He added, “We are encouraged by the court’s recognition that these tariffs exceeded the President’s authority. This ruling brings needed clarity and stability for companies navigating global supply chains.”
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Jeffrey Schwab, director of litigation at Liberty Justice Centre, which represented the two companies, said it remained unclear how the ruling would play out if it applied only to the plaintiffs. He said that “of course brings up a lot of questions about how this will play out”. He also said other companies could likely file lawsuits to seek refunds, depending in part on whether the government appeals or lets the tariffs expire on July 24 as scheduled.
Trump blamed the decision on “two radical left judges”. Speaking to reporters after viewing a reflecting pool renovation project in Washington, he said: “So, nothing surprises me with the courts. Nothing surprises me. We get one ruling and we do it a different way.”