A U.S. federal trade court has ruled against Donald Trump’s latest 10 per cent global tariff plan, dealing a significant legal setback to the administration’s trade strategy.
The United States Court of International Trade found that the sweeping tariffs introduced in February were not legally justified under the trade law Trump relied upon to impose them.
The court ruled 2-1 in favour of a group of small businesses that challenged the tariffs, arguing the measures exceeded presidential authority and improperly used emergency trade powers.
Trump had invoked Section 122 of the Trade Act of 1974, which permits temporary tariffs of up to 150 days to address serious balance-of-payments problems or prevent major depreciation of the U.S. dollar.
However, the court concluded that the trade deficits cited by the administration did not meet the legal threshold required under the statute.
The tariffs, which took effect on Feb. 24, applied broadly across imports and were presented by the administration as part of efforts to protect American industry and reduce trade imbalances.
The lawsuit argued the tariffs were also an attempt to bypass an earlier U.S. Supreme Court ruling that struck down separate Trump-era tariffs imposed under the International Emergency Economic Powers Act.
One judge dissented, saying the court acted prematurely in granting victory to the business plaintiffs.
The decision represents another challenge for Trump’s aggressive trade agenda, which has relied heavily on tariffs and executive powers during his presidency.
The administration has not yet indicated whether it plans to appeal the ruling.