A U.S. Court of International Trade panel ruled Thursday that 10% [1] across-the-board global tariffs imposed by President Donald Trump were not justified.
The decision challenges the administration's ability to implement sweeping trade barriers without specific legislative authorization, potentially limiting the executive branch's power to unilaterally alter trade costs for businesses.
The ruling came from a three-judge panel [3] in New York City. In a 2-to-1 [2] decision, the judges found that the tariffs, which took effect in February 2026 [4], exceeded the authority granted by the Trade Act of 1974. The court said that Section 122 of the act was not intended to address such across-the-board duties [1], [2].
Small-business plaintiffs brought the challenge against the measures. While some reports suggest a broader invalidation of the tariffs, the court's decision formally applies only to the plaintiffs involved in the case [5].
The 10% [1] tariffs were designed to apply globally, regardless of the origin of the goods. By overturning these duties for the plaintiffs, the court has created a legal precedent that may encourage other businesses to file similar challenges against the administration's trade policies.
Legal representatives for the plaintiffs argued that the administration bypassed necessary congressional oversight. The court said that the 1970s-era law did not provide the broad discretion the president used to enact the February [4] measures.
“The court found that the 10% tariffs exceeded the authority granted by the Trade Act of 1974.”
This ruling creates a significant legal hurdle for the administration's trade strategy by affirming that the Trade Act of 1974 does not grant unlimited power to impose global tariffs. Although the immediate financial relief is limited to the specific plaintiffs, the 2-to-1 decision provides a roadmap for other importers to challenge the legality of the 10% duties, potentially eroding the tariffs' effectiveness as a broad economic tool.
