President Trump’s Tariff Battle Faces Another Legal Setback
The legal battle surrounding President Trump’s latest tariff policy took another dramatic turn this month, adding further uncertainty to an already volatile global trade environment.
On May 7th, the US Court of International Trade ruled that the interim 10% tariffs introduced in January were unlawful, stating that the “tariffs imposed on Plaintiffs are unauthorised by law.” The decision represented another significant setback for the administration’s wider trade strategy.
However, the ruling was swiftly paused after a federal appeals court granted a short-term administrative stay, allowing the government additional time to respond while the case continues through the legal system.
At the heart of the dispute is whether the tariffs, introduced under Section 122 of the 1974 Trade Act, fall within the limits of presidential authority. That interpretation is being legally challenged by 24 US states.
The case has also drawn comparisons to the earlier Supreme Court ruling that struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA). In that instance, the courts ruled against the administration, leading to billions of dollars in refunds for affected businesses.
Even if the current legal challenge is ultimately unsuccessful, the tariffs themselves remain temporary. Under Section 122, such measures can only stay in place for a maximum of 150 days unless Congress approves an extension, meaning they are currently set to expire in July.
Despite mounting legal pressure, President Trump appears undeterred and is reportedly exploring alternative routes, including the possible use of Section 301 powers as a potential “Plan C” for introducing future tariffs.
For businesses operating in or trading with the US market, uncertainty shows little sign of easing. Killick Martin will continue to monitor developments closely as the legal and political landscape evolves.
