A US trade court has ruled President Trump's 10% global tariffs illegal under a 1974 trade law, but granted relief only to two small importers and Washington State. The decision leaves duties in place for most businesses while the administration plans to appeal and pursue alternative tariff strategies before the levies expire in July.
A US trade court has ruled against President Donald Trump’s 10% temporary global tariffs, declaring them unlawful under a 1970s trade statute. However, the decision only blocks the duties for three specific parties, leaving them in effect for most importers.
The US Court of International Trade delivered a 2-1 verdict stating that Trump’s use of Section 122 of the Trade Act of 1974 was unjustified. The ruling applies to two private companies—toy manufacturer Basic Fun! and spice importer Burlap & Barrel—plus Washington State. All other importers remain subject to the tariffs pending appeal.
The court rejected a broader injunction requested by 24 states, ruling that most lacked standing as they weren’t direct importers who paid the tariffs. Washington State qualified through its public university system.
Trump dismissed the decision, attributing it to “two radical left judges” and indicating his administration would pursue alternative approaches to imposing tariffs.
On 20 February 2026, the US Supreme Court ruled 6-3 on 20 February 2026 in Learning Resources v. Trump that President Donald Trump exceeded his authority by imposing broad global tariffs under the International Emergency Economic Powers Act (IEEPA) of 1977. Writing for the majority, Chief Justice John Roberts said the law does not authorise the president to impose tariffs, noting that the Constitution grants that power to Congress.
Trade deficit argument fails
The Trump administration had justified the Section 122 tariffs by citing a USD 1.2 trillion annual US goods trade deficit and a current account deficit representing 4% of GDP. The court found this reasoning inappropriate for the law, which was designed to address serious balance-of-payments crises or imminent dollar depreciation. Economists have questioned the premise from the outset.
What happens next
The temporary tariffs are scheduled to expire in July 2026. The Trump administration plans to appeal while pursuing permanent tariffs under Section 301 of the Trade Act, which targets unfair trade practices. Three Section 301 investigations are underway, with completion expected in July.
Legal expert Dave Townsend from Dorsey & Whitney predicted the case would likely reach the Supreme Court, while other importers may now seek similar relief.
The ruling comes ahead of Trump’s scheduled meeting with Chinese President Xi Jinping in Beijing and follows a Supreme Court decision three months ago that struck down Trump’s broader global tariffs imposed under emergency powers.
