Court Strikes Down Trump Administration’s Illegal Section 122 Tariffs—But Relief Is Limited

The U.S. Court of International Trade (CIT) has invalidated the Trump administration’s 10 percent tariffs imposed under Section 122 of the Trade Act of 1974, finding they were unlawfully applied. The court ruled that the administration failed to base the tariffs on the “large and serious” balance-of-payments deficits as Congress intended when it passed the law in 1974. This legal misstep makes the tariff proclamation ultra vires—beyond the president’s authority—and therefore invalid for the plaintiffs involved.

The tariffs, slapped on nearly all imports starting February 24, 2026, were a desperate attempt to sidestep the Supreme Court’s prior rejection of earlier tariffs imposed under the International Emergency Economic Powers Act (IEEPA). But the CIT’s decision exposes the administration’s pattern of ignoring statutory limits and judicial oversight in its aggressive trade war tactics.

The court’s reasoning hinged on the specific economic indicators Congress recognized in 1974: the basic balance, liquidity, and official settlements. The administration instead relied on modern measures like the current account balance and goods trade deficits, which the court found did not meet the statute’s original meaning. This narrow but crucial legal interpretation invalidated the tariffs for the plaintiffs—24 states and two small business importers—and led to a permanent injunction against collecting these tariffs from them.

However, the ruling offers only limited relief. Tariffs continue to be collected from importers who were not part of the lawsuit, and the government is expected to appeal. The Department of Justice will likely seek to overturn the decision at the Federal Circuit Court, and may try to pause the injunction during the appeal.

Meanwhile, the administration is already preparing to replace these invalidated tariffs with new ones under Section 301 of the Trade Act. These tariffs, targeting up to 60 countries and justified by investigations into forced labor and manufacturing excess capacity, are expected to take effect as the Section 122 tariffs expire on July 24, 2026. Unlike Section 122, Section 301 imposes fewer limits on tariff duration and scope, raising concerns about unchecked trade retaliation and economic harm.

For importers caught in this legal crossfire, the ruling opens the door to potential refunds on Section 122 tariffs paid, but only if they carefully preserve documentation and monitor the evolving legal landscape. Washington state also benefits from the ruling due to its importer status.

This court decision is a rare check on the administration’s tariff overreach, but it underscores the ongoing chaos and uncertainty inflicted on American businesses and consumers by reckless trade policies. As the administration pivots to Section 301 tariffs, the fight over lawful limits and economic consequences is far from over.

We will keep tracking these developments because when the government flouts laws to wage trade wars, it is working against the interests of everyday Americans and the integrity of democratic governance.