US Court Strikes Down Trump's Latest Global Tariff Move on Trade Authority

In a 2-1 ruling, the US Court of International Trade said the Trump administration could not rely on broad trade and current account deficits to justify the tariffs under Section 122 of the Trade Act of 1974.

The court ruled that the law was designed to address specific "balance-of-payments" crises linked to the international monetary system that existed in the 1970s, not modern trade deficits.

Judges Mark A. Barnett and Claire R. Kelly wrote that Trump's proclamation "fails to assert that those required conditions have been satisfied."

Trump imposed the tariffs in February after the Supreme Court earlier this year struck down his previous tariff regime under emergency powers law. The new tariffs were announced under Section 122, which allows temporary import surcharges of up to 15 per cent for 150 days.

The court said the administration relied on current account deficits and trade deficits instead of the narrower "balance-of-payments deficits" Congress intended when it passed the law in 1974.

"Rather than identifying 'balance-of-payments deficits' as that term was intended in 1974, the Proclamation relies upon current account deficits, and a discussion of 'a large and serious trade deficit,'" the majority wrote.

The judges warned that accepting such a broad interpretation would effectively give presidents unlimited tariff authority.

"Such an expansive reading of the statute would raise a non-delegation issue, which in turn would prompt a constitutional question," the ruling said.

The decision sided with two importers - Burlap and Barrel and toy company Basic Fun - along with the State of Washington, while dismissing claims from several other Democratic-led states for lack of standing.

Judge Timothy Stanceu dissented. He argued the court should not second-guess the President's economic judgment or narrowly define how balance-of-payments deficits are measured.

The ruling is expected to be appealed to the US Court of Appeals for the Federal Circuit and could eventually return to the Supreme Court.

In February, shortly after the Supreme Court struck down his earlier tariffs under the International Emergency Economic Powers Act, Trump lashed out at the justices during an appearance at the White House briefing room.

"We're going forward," Trump said at the time. "We will be able to take in more money."

Trump had defended Section 122 as one of several "very powerful alternatives" available to him after the Supreme Court rejected his earlier tariff regime.

The latest ruling comes amid growing legal and political scrutiny of Trump's use of executive authority on trade. Critics, including some Republicans, have argued that Congress - not the White House - holds constitutional authority over tariffs and trade policy. Senate Republican leader Mitch McConnell had earlier said using emergency authorities "to circumvent Congress in the imposition of tariffs" was illegal.

- IANS