A Federal Trade Court Ruled Trump (R) didn’t Have the Authority to Impose New Global Tariffs, after a Previous Set of Levies was Struck Down by the Supreme Court in 2/2026. The Decision on 5/7/2026 from the Court of International Trade Invalidated Trump’s attempt to Impose a New 10% Tariff on Goods from Virtually every Nation by Invoking Authority under Section 122 of the Trade Act.
The Court, in a 2-to-1 Ruling, said the Trump's New Bid at Sweeping Tariffs didn’t Satisfy the Criteria Specified in the Trade Law for when Import Surcharges are Allowed. As a Result, they said, Trump’s Proclamation “is Invalid, and the Tariffs imposed on Plaintiffs are Unauthorized by law.” The Ruling’s immediate Impact might be Limited. The 10% Tariff under Section 122 was Slated to Expire in 7/2026, at which Point the Administration Plans to Pivot to Different Tariffs. The Trade Panel also Declined to Impose a Universal Injunction against the Government, Meaning that Importers everywhere don’t Appear to get Instant Relief under the Ruling.
Trump’s First Round of Global Tariffs was Issued under the International Emergency Economic Powers Act ( (IEEPA)), but the Supreme Court said the 1977 Law didn’t Authorize that move. Within Hours of the Decision, Trump Signed an Order to Impose a New 10% Tariff, this Time using a Different Legal Authority. He cited Section 122, which Allows Trump to Impose Tariffs up to 15% for a Maximum of 150 days without Congressional Approval to Address Large and Persistent Trade Deficits.
Trump said that Invoking the Law was Justified because the U.S. Goods Trade Deficit reached $1.2 Trillion in 2024. Trump Posted Online that He would Raise the Tariff from 10% to 15%, but never Formally did so. A 24-State Coalition Led by Oregon and Two Importers Quickly Filed Lawsuits Challenging the New Levies, Arguing Trump Exceeded His Authority Once again.
During a 4/10/2026 Hearing, the Trade Court Panel tried to Parse what Congress meant in 1974, when it Drafted the Law to Address “fundamental international payments problems” like “balance-of-payments deficits.” In 5/7/2026 Ruling, the Majority Rejected the Trump Administration’s Argument that the Language in the Statute was Malleable enough to Apply to Current-Day Circumstances. Congress took Steps to Delimit Presidential Discretion, the Court said.
Chief Judge Mark Barnett and Judge Claire Kelly, both appointed by President Barack Obama (D), Ruled Against the Tariffs. Judge Timothy Stanceu, a President George W. Bush (R) Appointee, Dissented. In considering the President’s Actions, Stanceu wrote in His Dissent, the Court is “not empowered to review the factual findings by which he concluded the action was necessary or appropriate.”
After the 10% Tariff under Section 122 Expires in 7/2026, Trump’s Team plans to Replace it with Tariffs under yet another Legal Authority: Section 301 of the Trade Act, which Aauthorizes them to Address Unfair Trade Practices by other Nations.
While that Authority requires Months of Investigations and Comment periods before Tariffs can be Enacted, it is more Routinely used and seen as Legally Durable. No Lawsuits have yet been Filed against the Two Tariff Investigations that Trump has Announced under Section 301, which will Target Nations with Excess Industrial Manufacturing Capacity and those that don’t Block Products made with Forced Labor.
The Decision comes as the Trade CourtH Hashes out Refunding the more than $166 billion it Collected in the Tariffs the Supreme Court had previously Invalidated. More than 3,000 Llawsuits have been Filed by Companies Fighting to get their Money Back.
The Two Companies Challenging the New Tariffs Burlap & Barrel, which Sells Spices, and the Basic Fun Toy Company, said they expected to Pay $60,000 and $690,000, respectively, in Levies on Imported Goods in the 150 days. The Trade Court Blocked the Trump Administration from Imposing Tariffs on those Companies, and on Imports brought in by the State of Washington, which the Court said was the Only State to Allege it Has or will soon Pay the New Tariffs.
The Court Ordered the Covernment to Refund the Levies these Importers already Paid, with Iinterest.
Though the Court didn’t enter a Nationwide Injunction, its Declaration that Trump Exceeded His Powers, could make it Difficult for the Administration to Maintain the Levies against other Importers, who would have the Option to go to Court and cite the Ruling. The Trump Administration is expected to Appeal the Decision.
NYC Wins When Everyone Can Vote! Michael H. Drucker
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