A US federal trade court has invalidated President Donald Trump’s recent attempt to impose a 10% import surcharge on goods entering the United States. The court ruled that the administration overstepped its authority under a 1974 trade law by using broad trade and current account deficits to justify the tariffs. This move was deemed to exceed the law’s original purpose of addressing specific balance-of-payments crises from the 1970s.
Judges Mark A. Barnett and Claire R. Kelly emphasized that Trump’s proclamation did not meet the necessary conditions as required by the law. The court’s decision stemmed from the administration’s reliance on current account deficits and trade deficits, rather than the intended balance-of-payments deficits outlined in the Trade Act of 1974.
The ruling cautioned that adopting such a broad interpretation could grant presidents extensive tariff powers, potentially leading to a constitutional issue. The decision favored two importers, Burlap and Barrel, and toy company Basic Fun, along with the State of Washington. However, claims from other Democratic-led states were dismissed due to lack of standing.
Trump’s tariffs were introduced in February under Section 122, allowing temporary import surcharges for up to 15% over 150 days. The dissenting opinion from Judge Timothy Stanceu argued against second-guessing the President’s economic judgment or narrowly defining balance-of-payments deficits.
The case is anticipated to be appealed to the US Court of Appeals for the Federal Circuit and could eventually reach the Supreme Court. The ruling marks a significant development amid ongoing legal and political scrutiny of Trump’s executive actions on trade. Critics, including some Republicans, have contended that Congress, not the White House, should have authority over tariffs and trade policy.
