Trade court rejects Trump’s 10% global tariffs in victory for small businesses

The US trade court made a ruling on Thursday against President Trump’s recent 10% global tariffs. The court found that the across-the-board tariffs were not justified under a 1970s trade law.

In a 2-1 ruling, the US Court of International Trade sided with small businesses that challenged the tariffs that came into effect on Feb. 24. One judge mentioned that it was premature to declare victory for the small business plaintiffs.

The small businesses argued that the new tariffs were an attempt to bypass a significant US Supreme Court decision that overturned the president’s 2025 tariffs imposed under the International Emergency Economic Powers Act.

In February, Trump invoked Section 122 of the Trade Act of 1974 in his order, allowing duties for up to 150 days to address serious balance of payments deficits or prevent an imminent depreciation of the dollar.

The recent court ruling concluded that the law was not an appropriate measure for the trade deficits cited by Trump in his February order.

“This decision is a significant victory for American companies that rely on global manufacturing to provide safe and affordable products. Illegal tariffs make it challenging for businesses like ours to compete and expand,” said Jay Foreman, CEO of toymaker Basic Fun!

“We are pleased with the court’s acknowledgment that these tariffs exceeded the President’s authority. This ruling offers much-needed clarity and stability for companies managing global supply chains,” he added in a statement.

The Trump administration argued that there was a significant balance-of-payments deficit with an annual US goods trade deficit of $1.2 trillion and a current account deficit of 4% of GDP. However, some economists and trade lawyers dispute that the US is on the brink of a balance-of-payments crisis, making the new duties susceptible to legal challenges.