By Munshi Firoz Al Mamun
As Donald Trump activates a 10% global tariff under Trade Act of 1974 Section 122, a new legal confrontation is emerging: can the tariff be applied to imports that entered the United States before the executive order took effect?
The question has gained urgency after the Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA). With billions previously collected under that framework, businesses are now seeking clarity on whether the administration could use the new tariff to compensate for—or effectively replace—those invalidated duties.
Q: Is Trump’s new 10% global tariff related to IT services and outsourcing that US businesses import from other countries?
A: No. The 10% tariff imposed under the Trade Act of 1974 applies to physical goods entering the United States, not to cross-border services. IT outsourcing, software development, BPO, digital marketing, cloud services, and other remote professional services are classified as service imports, which are not subject to customs tariffs. However, broader trade tensions can still create indirect economic effects such as currency shifts or regulatory changes.
A Longstanding Legal Barrier
American jurisprudence generally disfavors retroactive lawmaking. Courts operate under a strong presumption that statutes and executive actions apply prospectively unless Congress unmistakably provides otherwise.
While the U.S. Constitution does not categorically ban retroactive economic laws, it embeds clear safeguards.
Article I prohibits ex post facto laws—primarily in criminal contexts—but the principle reflects a broader constitutional commitment to fairness and predictability.
In economic regulation, the Fifth Amendment’s Due Process Clause has frequently been invoked to challenge retroactive financial burdens that disrupt settled commercial expectations.
Trade law follows this tradition. Courts have consistently required explicit congressional language before allowing duties or taxes to apply retroactively.
Section 122 contains no such authorization. Instead, it grants the president limited authority to impose tariffs of up to 15% for a 150-day period to address balance-of-payments concerns—suggesting temporary, forward-looking measures rather than backward adjustments.
Timing Is Central
Unlike IEEPA-based tariffs, Section 122 rests on a clearly defined trade statute. However, executive proclamations typically take effect on the date specified within them.
Customs authorities assess duties according to the tariff schedule in place at the time goods enter the country.
Applying a new tariff to goods already processed through customs would likely spark immediate legal objections.
Importers could argue violations of due process, unlawful taxation without clear congressional mandate, and breaches of procedural protections under administrative law.
Legal analysts note that retroactive economic regulation faces especially intense judicial scrutiny when it imposes unexpected financial obligations on businesses that relied on existing rules.
Refunds and Replacement: Separate Questions
The newly imposed 10% tariff does not automatically offset or nullify duties collected under the now-invalidated IEEPA framework.
Claims for reimbursement are expected to proceed separately, most likely before the United States Court of International Trade, which handles customs and trade disputes.
That distinction is crucial. Even if the new tariff stands, it does not retroactively legitimize or absorb past collections unless a court explicitly permits such a mechanism.
Economic and Political Stakes
For businesses operating across global supply chains, predictability in customs enforcement is critical. Retroactive tariffs could unsettle contracts, pricing strategies, and financial forecasts. Investors are monitoring developments closely, aware that prolonged litigation could generate further volatility.
If the administration attempted to extend the 10% tariff backward in time, legal challenges would likely be swift and forceful.
Injunction requests could quickly reach federal courts, potentially setting the stage for another high-profile constitutional dispute over executive trade authority.
The Bottom Line
President Trump retains statutory power under Section 122 to impose temporary tariffs. But constitutional safeguards, established judicial doctrine, and the statute’s silence on retroactivity strongly indicate that the 10% global tariff applies from its effective date forward—not to imports already cleared under previous rules.
As refund litigation unfolds and businesses weigh their options, the broader battle over executive trade power appears far from resolved.
🔗 Read more:
https://thereporter24.com/news/legal-battles-ahead-challenges-loom-over-trump-s-new-10-global-tariff
https://thereporter24.com/news/trump-moves-to-bypass-supreme-court-ruling-with-fresh-10-global-tariff
https://thereporter24.com/news/us-supreme-court-blocks-trump-s-liberation-day-tariffs-a-constitutional-rebuke-with-global-ripples
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