By Jacob Rosen and Faris Tanyos | Updated May 7, 2026
A federal trade court on Thursday found President Trump’s most recent round of global 10% tariffs unlawful, siding with a coalition of 24 states and several businesses that challenged the duties.
In a 2-1 decision, a three-judge panel of the U.S. Court of International Trade issued a 53-page opinion ruling that the administration’s use of Section 122 of the Trade Act of 1974 to impose temporary 150-day tariffs was invalid. The plaintiffs, who filed suit in March, argued the White House exceeded its authority when it imposed the tariffs in February after the Supreme Court struck down an earlier set of levies.
The earlier tariffs — mostly issued in April 2025 under the International Emergency Economic Powers Act (IEEPA) and dubbed “Liberation Day” tariffs — were rejected by the Supreme Court in a 6-3 decision, which found IEEPA did not authorize the president to impose tariffs. After that ruling, the administration turned to Section 122, a provision that authorizes short-term duties to address “large and serious … balance-of-payments deficits.”
The court concluded the administration’s proclamation invoked different economic concepts — focusing on the U.S. trade deficit and the current account deficit — rather than the statutory “balance-of-payments” deficit required by Section 122. The judges said the collection of Section 122 duties produced “economic harm” to the plaintiffs and called the tariffs “unlawful.”
The ruling requires the government to stop charging the tariffs to the state of Washington and two businesses that sued, and it orders refunds plus interest for duties those plaintiffs paid. The court did not issue a nationwide injunction invalidating the tariffs for all importers.
The Biden-era appointed judges? Two Obama-appointed judges joined the majority; the dissent came from a George W. Bush-appointed judge.
The Trump administration has indicated it plans to pursue longer-lasting duties through a different legal pathway after conducting investigations into foreign trade practices. Meanwhile, the administration is also expected to begin issuing refunds this month to businesses that paid duties levied under the IEEPA-based tariffs.
When asked about the decision, President Trump criticized the judiciary, saying “nothing surprises me with the courts” and calling the majority judges “radical left.” He suggested his tariff strategy would continue in other forms, saying, “We always do it a different way. We get one ruling, and we do it a different way.”
Reporters Kathryn Watson, Lucia I. Suarez Sang, Melissa Quinn and Joe Walsh contributed to this report.