Federal Court Takes Up Challenge to Trump’s Latest Global Tariffs After Supreme Court Blow

The Trump administration’s signature economic weapon — broad global tariffs — is once again facing legal fire. On Friday, the U.S. Court of International Trade in New York heard arguments challenging President Trump’s latest round of import taxes, which he imposed under a different legal authority after the Supreme Court invalidated his first attempt.

Last year, Trump relied on the 1977 International Emergency Economic Powers Act (IEEPA) to declare America’s trade deficit a national emergency and slap double-digit tariffs on imports from around the world. The Supreme Court rejected that move on February 20, ruling that IEEPA does not authorize tariffs to address trade imbalances or “national emergencies” of this kind.

Undeterred, Trump pivoted to Section 122 of the Trade Act of 1974, a law designed to allow the president to impose temporary tariffs of up to 15% for 150 days to address “fundamental international payments problems.” Trump set a 10% tariff rate under this section, with plans to raise it to the maximum 15%, though that increase has yet to happen. These tariffs are set to expire on July 24 unless extended with congressional approval.

The legal battle now centers on whether Section 122’s phrase “fundamental international payments problems” actually covers trade deficits — the gap between what the U.S. exports and imports. This provision was originally crafted during the 1960s and 1970s financial crises, when the U.S. dollar was pegged to gold, and countries exchanging dollars for gold threatened currency stability. Since the dollar no longer operates under the gold standard, critics argue Section 122 is outdated and irrelevant to current trade disputes.

Adding to the confusion and contradiction, the Trump Justice Department itself admitted in court last year that Section 122 “does not have any obvious application” to trade deficits, calling them “conceptually distinct” from payments problems. Meanwhile, the trade court that invalidated Trump’s IEEPA tariffs noted in its ruling that Section 122 was available to address trade deficits — a direct contradiction.

This tangled legal mess highlights the administration’s aggressive and legally questionable use of trade laws to impose tariffs that have sparked economic chaos, raised prices for American consumers, and provoked retaliatory tariffs from allies and adversaries alike.

As this case unfolds, it will test the limits of presidential power over trade policy and whether Trump’s tariff war can stand on shaky legal ground. The stakes are high for American workers, industries, and the global economy — and for holding this administration accountable for its reckless economic gambits.