The 2–1 decision from the US Court of International Trade found that the administration failed to meet the requirements under Section 122 of the Trade Act of 1974, intensifying legal and political uncertainty around Trump’s tariff strategy.
By PC Bureau
May 7, 2026: President Donald Trump’s 10% universal tariffs have been thrown into legal jeopardy after a federal court ruled on Thursday that they were unlawful, marking another major setback this year for his core economic agenda.
In a 2–1 decision, judges at the US Court of International Trade concluded that the administration did not have sufficient legal grounds to impose the tariffs under Section 122 of the Trade Act of 1974. The ruling follows an earlier Supreme Court decision this year that invalidated a broader set of tariff measures.
The court ordered the administration to stop collecting these tariffs from the plaintiffs involved in the case and to refund payments already made. While the judgment applies only to those plaintiffs, it represents a significant blow to the administration’s ability to use the law as a basis for sweeping import duties.
Section 122 permits a president to impose tariffs of up to 15% on all imports without congressional approval, but only under specific conditions. In this case, the judges found that the administration failed to meet the legal threshold. The majority opinion stated that the presidential proclamation did not identify “large and serious United States balance-of-payments deficits” in the manner Congress intended the law to be applied.
Despite the ruling, the tariffs may remain in effect for other importers until July, excluding the plaintiffs in the case.
🚨 The U.S. Court of International Trade struck down President Trump’s 10% global tariff on imported goods, holding he exceeded his authority under Section 122 of the Trade Act. pic.twitter.com/VXiCbt9TJ4
— SCOTUS Wire (@scotus_wire) May 7, 2026
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At present, the administration’s remaining tariff tools largely consist of industry-specific levies, though officials have already begun exploring new country-wide tariff measures under alternative legal authorities.
An appeal is widely expected.
Reacting to the decision, Trump told reporters the administration would “do it a different way,” adding: “Nothing surprises me with the courts. We always do it a different way. We get one ruling, and we do it a different way.”
Earlier this year, the Supreme Court struck down a broad set of Trump’s tariffs, prompting the administration to rework its approach and rely on previously untested provisions of the 1974 Trade Act.
The ongoing legal battles highlight the volatility surrounding the administration’s trade strategy, which has seen repeated tariff announcements and reversals, leaving importers struggling to keep up with shifting rules.
Uncertainty remains over refunds for tariffs already deemed unlawful. While affected importers can apply for reimbursement, the process is expected to roll out gradually, with no clear timeline for full implementation. Future administrative action could also influence the final refund amounts, potentially delaying payouts further.
