A panel of trade court judges challenged the legality of President Donald Trump’s 10 per cent tax on most imports, suggesting a large trade deficit might not be a sufficient reason to impose broad-based tariffs.
The US Court of International Trade heard arguments yesterday in lawsuits by 24 mostly Democratic-led states and by small businesses challenging the tariffs, which took effect on February 24.
Those states argue Trump’s move was an attempt to sidestep a landmark US Supreme Court decision four days earlier that struck down the Republican president’s 2025 tariffs imposed under the International Emergency Economic Powers Act (IEEPA).
Those tariffs upended corporate trade throughout much of 2025, reducing business investment as billions of dollars in levies went into the federal coffers, before being overturned by the nation’s highest court in February.
Even with those tariffs – many of which exceeded 10pc – the trade deficit was $901.5 billion in 2025, little changed from a year earlier.
In his February order, Trump invoked Section 122 of the Trade Act of 1974, which allows for duties for up to 150 days to correct serious ‘balance of payments deficits’ or head off an imminent depreciation of the dollar.
The states and small businesses opposing Trump said that law was meant only to address short-term monetary emergencies, and routine trade deficits do not match the economic definition of ‘balance-of-payments deficits’.
Trump has made tariffs a central pillar of his second-term foreign policy, claiming sweeping authority to issue tariffs without input from Congress.
No US president before Trump had used Section 122 or IEEPA to impose tariffs.
Brian Marshall, a lawyer for the state of Oregon, urged the judges to block the 10pc tariffs rather than let them expire on the normal 150-day timeline, to keep Trump from invoking a variety of laws to keep them in place indefinitely.
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