A federal court has ruled against President Donald Trump’s latest attempt to revive broad tariffs, delivering another legal setback to one of the central pillars of his economic agenda.
On Thursday, the U.S. Court of International Trade concluded that Trump unlawfully used Section 122 of the Trade Act of 1974 to impose a 10% global tariff after the Supreme Court earlier struck down his wider tariff program.
The decision came from a divided three-judge panel, with Judges Mark Barnett and Claire Kelly siding against the administration. Judge Timothy Stanceu dissented.
Court Says Trump Misused Section 122
After his original tariff strategy ran into legal trouble, Trump’s administration turned to Section 122 as an alternative method to continue imposing import duties.
The law allows a president to temporarily impose tariffs of up to 15% for no more than 150 days during serious international payment problems or major balance-of-payments crises. But the court ruled that the administration’s justification did not meet the legal requirements laid out in the statute.
In the majority opinion, the judges wrote:
“Trump’s February proclamation imposing the new tariffs is invalid, and the tariffs imposed on Plaintiffs are unauthorized by law.”
The ruling argued that the administration stretched the Nixon-era law beyond its intended purpose.
BREAKING: The Court of International Trade has just ruled AGAINST Trump’s alternate method of reintroducing tariffs.
Trump just lost again!
This is great for Americans who didn’t want to be taxed.
A Win for us all! pic.twitter.com/DZTCnEBb2D
— Brian Krassenstein (@krassenstein) May 7, 2026
Why the Ruling Matters
Although the court stopped short of blocking the tariffs nationwide, the ruling could still have major consequences.
The injunction only applies to the specific plaintiffs involved in the case:
- Washington state
- Spice importer Burlap & Barrel
- Toy company Basic Fun!
The judges determined that other states and businesses involved in the broader lawsuit did not have legal standing.
Still, legal analysts say the decision creates a strong precedent that could encourage more businesses to challenge the tariffs in court.
Businesses Celebrate the Decision
The companies involved in the lawsuit quickly celebrated the ruling, saying the tariffs created financial uncertainty and disrupted global supply chains.
Basic Fun! CEO Jay Foreman called it: “An important win for American companies that rely on global manufacturing.” Burlap & Barrel co-founders Ethan Frisch and Ori Zohar described the ruling as: “A major victory for small businesses like ours.”
Trade groups also highlighted the financial impact of the tariffs. Dan Anthony, executive director of the We Pay the Tariffs coalition, said businesses paid roughly $8 billion in Section 122 tariffs in March alone.
Trump Administration Expected to Appeal
Trade attorney Tim Brightbill called the ruling a “decisive rejection” of Trump’s use of Section 122.
Still, he noted that the tariffs will likely remain in place for most companies while the appeal process continues.
The case is expected to move to the U.S. Court of Appeals for the Federal Circuit, which has already ruled against other Trump tariff programs tied to emergency authorities.
A Bigger Fight Over Presidential Power
The ruling also reignites a larger debate over how much power a president should have when it comes to trade policy. Critics argued throughout the case that Section 122 was never intended to support sweeping modern tariff programs or long-term trade battles.
Instead, they said the law was designed for narrow financial emergencies involving international payments and currency problems. Even with this setback, the Trump administration is still pursuing other trade actions.
The Office of the U.S. Trade Representative has already launched investigations under Section 301 of the Trade Act of 1974, a move that could lead to another major round of tariffs later this year.
Trump’s Trade Agenda Faces More Legal Pressure
The latest court ruling adds to the growing legal pressure surrounding Trump’s aggressive trade policies.
Supporters argue tariffs protect American manufacturing and counter unfair trade practices from foreign countries.
Critics argue they increase costs for businesses and consumers while creating uncertainty across the economy.
With appeals expected and new tariff investigations already underway, the legal and political battle over Trump’s trade strategy is far from over.
Do you think courts are right to block Donald Trump’s tariff plans, or should presidents have broader authority to impose tariffs without congressional approval?