A US trade court panel, comprised of three judges, is scheduled to review the legality of 10 percent global tariffs imposed by the Trump administration. The hearing, set for 10 a.m. ET, stems from a legal challenge brought by a coalition of 24 Democratic-led states and two small businesses.
The plaintiffs argue that these new tariffs, which took effect on February 24, circumvent a previous US Supreme Court ruling. In an earlier decision, the Supreme Court had invalidated most tariff penalties imposed under the International Emergency Economic Powers Act (IEEPA), deeming the executive branch’s actions beyond its legal authority as granted by the statute.
The plaintiffs assert that the Trade Act of 1974 can only be invoked to address short-term monetary emergencies. They argue that routine trade deficits do not align with the economic definition of balance-of-payment deficits, according to their lawsuits.
Under Trump’s presidency, tariffs have been a cornerstone of his policy agenda, aimed at reducing America’s persistent trade deficit. The US trade deficit recently reached approximately $1.2 trillion.
The administration has already collected over $130 billion in tariffs using the 1977 IEEPA, as reported by officials. New tariffs were imposed under Section 122 of the Trade Act of 1974, allowing the president to impose 15 percent duties for up to 150 days on imports during “large and serious United States balance-of-payment deficits.” These duties could also be levied to prevent an imminent depreciation of the US dollar.
The current lawsuits are limited in scope as they do not challenge tariffs imposed under more traditional authority or existing duties on steel, aluminum, and copper.