S. Court of International Trade has ruled that the 10 percent global tariff imposed by President Donald Trump under Section 122 of the Trade Act of 1974 is illegal, marking the second judicial defeat this year for the administration's tariff regime.
Trump invoked Section 122, a previously unused provision allowing temporary import surcharges of up to 15 percent for 150 days to eliminate a balance of payments deficit, back in February after the Supreme Court overturned his previously sweeping tariffs imposed under the International Emergency Economic Powers Act. The surcharge in accordance with section 122 expired on July 24.
The Court rejected the Administration's argument that the charter's reference to a "balance of payments deficit" was equivalent to a trade deficit. The majority wrote that allowing the president to choose among the subaccounts to identify such a deficit would give the executive branch virtually unlimited tariff powers belonging to Congress. The third judge disagreed, considering that the law gives the president more freedom of action.
The injunction applies only to the plaintiffs, namely two small businesses and the state of Washington, while collection continues for most importers. Lawsuits filed by a larger group of States, led by Democrats, were dismissed for lack of due process. The Department of Justice filed a notice of appeal on May 8 to the U.
S. Court of Appeals for the Federal Circuit.
The resolution does not affect steel and aluminum
