A US trade court convened on Friday to evaluate the legality of a 10% global import tariff imposed by President Donald Trump. This tariff has faced opposition from several states and small businesses, who argue it circumvents a recent US Supreme Court ruling that invalidated most of Trump’s earlier tariffs.
The tariff, which took effect on February 24, was challenged in lawsuits filed by a coalition of 24 states—mostly led by Democrats—and two small businesses. The case is being heard by a three-judge panel of the U.S. Court of International Trade.
During the hearing, Oregon’s attorney Brian Marshall urged the judges to block the tariffs outright rather than allow them to expire after the standard 150-day period. He warned that permitting the tariffs to continue could enable the administration to repeatedly invoke various laws to maintain them indefinitely. Marshall emphasized that a continuous cycle of tariffs would pose a significant problem.
Marshall further argued that the tariffs rely on outdated legal authority originally designed to protect the US dollar from sudden depreciation in the 1970s, when the dollar was convertible to gold reserves stored at Fort Knox. He stated that this authority was intended to address severe “balance-of-payments deficits,” and that Trump’s use of it to manage routine trade deficits is inappropriate.
In his second term, Trump has made tariffs a cornerstone of his foreign policy, asserting broad executive power to impose tariffs without Congressional approval. The administration defends the global tariffs as a lawful and necessary response to the persistent trade deficit, where US imports exceed exports.
White House spokesperson Kush Desai stated, “President Trump is lawfully using the executive powers granted to him by Congress to address our country’s balance of payments crisis.” The tariffs were enacted under Section 122 of the Trade Act of 1974, which permits duties of up to 15% for a maximum of 150 days on imports during “large and serious United States balance-of-payments deficits” or to prevent imminent dollar depreciation.
The plaintiffs contend that the Trade Act’s tariff authority was intended solely for short-term monetary emergencies, and that routine trade deficits do not meet the economic criteria of “balance-of-payments deficits.” Notably, Trump announced the new tariffs on February 20, the same day the Supreme Court delivered a significant setback by striking down a broad range of tariffs he had imposed under the International Emergency Economic Powers Act (IEEPA). The Court ruled that the IEEPA did not grant him the authority he claimed.
It is worth noting that no previous US president had used the IEEPA or Section 122 to impose tariffs before Trump. The current lawsuits do not challenge other Trump-era tariffs imposed under more traditional legal frameworks, such as those on steel, aluminum, and copper imports.
