US trade court reviews legality of Trump’s 10% global tariff

A US trade court panel based on three judges is set to review the legality of 10 percent global tariffs imposed by the Trump administration on Friday.

The hearing, set for 10 a.m. ET, is based on a legal challenge brought by a group of 24 Democratic-led states and two small businesses. The plaintiff contends that these new unjustified tariffs, which took effect on February 24, bypass previous US Supreme Court ruling.

In a previous ruling, the Supreme Court struck down the majority of tariff penalties imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA), determining that the executive branch had exceeded the legal authority granted by the statute.

According to these small states and states, the Trade Act of 1974 can only be invoked to address short-term monetary emergencies. In the case of routine trade deficits, they do not align with the economic definition of balance-of-payment deficits, according to the two lawsuits.

In Trump’s second term, tariffs have become a central pillar of his policy, citing that these tariffs are helpful in bridging a persistent trade deficit.

According to the President, these tariffs are necessary to slash America’s trade deficit. Last week, the US trade deficit hit roughly $1.2 trillion.

The US has already collected at least $130bn in tariffs using the 1977 International Emergency Economic Powers Act, as reported by officials.

The administration imposed the new tariffs under Section 122 of the Trade Act of 1974, allowing the president to impose 15 percent duties for up to 150 days on imports during “large and serious United States balance-of-payment deficits.” Moreover, these duties could be levied to prevent an imminent depreciation of the US dollar.

The current lawsuits are specific in scope as they do not challenge tariffs imposed under more conventional authority and the existing duties on steel, aluminium, and copper.