Trade court says Trump's 10% global tariffs are unlawful
The Court of International Trade concluded the administration misread the law.
A federal court on Thursday concluded that President Donald Trump's global 10% tariffs are unlawful.
In a 2-1 decision, a panel of judges on the Court of International Trade concluded that the Trump administration misread the law used to justify the sweeping tariffs.
The ruling marks the second time the president's tariff regime has been found to be illegal, with the Supreme Court earlier this year affirming a decision from the Court of International Trade blocking Trump's first round of tariffs.
The immediate impact of Thursday's ruling is unclear. The court granted an injunction for two small businesses and the state of Washington; however, the judges dismissed the claims brought by the larger group of states because they lacked standing.
The dispute boiled down to the definition of the phrase "balance-of-payments deficits." The Court of International Trade rejected the Trump administration's argument that the term "balance-of-payments deficits" in Section 122 of the Trade Act of 1974 is the same as a "trade deficit."
"It is clear that Congress was aware of the differences in the words it chose," the majority wrote.
The judges acknowledged that the term "causes some confusion," but concluded that the Trump administration's interpretation was incorrect.
"The Government argues that in today's world, the current account is the proper component for identifying a balance-of-payments deficit," the majority wrote. "Problematically for the Government, and as discussed herein, Congress in 1974 identified the settlement, liquidity, and basic balance deficits as 'balance-of-payments deficits.'"
The global 10% tariff took effect in February and by statute is set to expire in late July.
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