A United States trade court has struck down President Donald Trump’s latest 10 percent global tariffs, ruling that the sweeping duties were not justified under a decades-old trade law and dealing a significant blow to his trade agenda.
The US Court of International Trade ruled on Thursday in favour of small businesses that challenged the tariffs, which came into force on February 24. In a 2-1 decision, the judges found that the administration exceeded its legal authority when imposing the across-the-board measures.
At the centre of the dispute was Trump’s reliance on Section 122 of the Trade Act of 1974, a provision that allows temporary tariffs for up to 150 days in response to serious “balance of payments” issues or to prevent currency instability. The court concluded that the law did not support the kind of broad global tariffs imposed in this case.
The administration had defended the policy by pointing to a $1.2 trillion annual US goods trade deficit and a current account deficit equal to about 4 percent of GDP. Officials argued these figures reflected a serious economic imbalance requiring urgent action.
But the court was not persuaded, siding instead with the small business plaintiffs who argued the tariffs were an unlawful attempt to bypass earlier legal limits placed on presidential trade authority. One judge, however, said it was premature to fully rule in favour of the challengers.
The case follows earlier legal setbacks for Trump’s trade strategy, including a Supreme Court decision that struck down tariffs imposed under the International Emergency Economic Powers Act in 2025. Businesses say the repeated policy shifts have created uncertainty across global supply chains.
Jay Foreman, chief executive of toy company Basic Fun!, welcomed the ruling, saying it protects American firms that depend on international manufacturing. He warned that unlawful tariffs had made it harder for companies to compete and maintain affordable prices.
While the ruling represents a setback for the Trump administration, it is expected to be reviewed further, as debates continue over the limits of presidential power in shaping US trade policy.
