NEW YORK — The U.S. Court of International Trade (CIT) issued a decisive ruling on Thursday, striking down a 10% global tariff implemented by the Trump administration.
The 2-1 decision serves as a significant legal roadblock for the President’s aggressive trade agenda, marking the second time in three months that federal courts have invalidated his tariff strategies.
The Legal Dispute: Section 122 vs. Executive Power
In February 2026, following a separate Supreme Court defeat, President Trump invoked Section 122 of the Trade Act of 1974. This specific provision allows a president to impose temporary duties (up to 150 days) to address a "serious balance of payments deficit."
However, the CIT ruled that the administration failed to prove a genuine "emergency" balance-of-payments crisis. The court stated that standard trade deficits—the primary justification cited by the White House—do not legally qualify as the type of catastrophic economic event the 1974 Act was intended to manage.
A Pattern of Litigation
This ruling is the latest chapter in what legal experts call a "game of cat and mouse" between the executive branch and the courts:
The IEEPA Attempt: Last year, the administration tried using emergency powers (IEEPA), which the Supreme Court struck down on February 20.
The Section 122 Attempt: This week's ruling closes the secondary loophole used to bypass that Supreme Court decision.
Impact on Global Markets
The ruling offers immediate relief to thousands of small and medium-sized enterprises (SMEs) that have seen their import costs soar since February 24. While the administration is expected to appeal the decision to the U.S. Court of Appeals for the Federal Circuit, the ruling effectively stays the collection of the 10% surcharge for now.
"This is a victory for the rule of law over executive overreach," stated lead counsel for the plaintiffs. "Trade policy cannot be changed on a whim without adhering to the specific statutes passed by Congress."
Quick Analysis Box:
The "150-Day" Rule: Under Section 122, tariffs are legally limited to 150 days unless extended by Congress. By striking it down now, the court has prevented the administration from attempting to renew the duties this summer.
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