U.S. Trade Court Blocks Trump’s 10% Global Tariffs Imposed Under Section 122

A U.S. federal trade court on Thursday ruled that former President Donald Trump’s 10% global tariffs imposed under Section 122 of the Trade Act of 1974 were unlawful, dealing another setback to his trade policy measures.

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A three-judge panel at the U.S. Court of International Trade in Manhattan ruled in favour of a group of small businesses and Democrat-led states that had challenged the tariffs introduced in February 2026. The court said the administration failed to establish the “balance-of-payments deficits” required under Section 122 for imposing such duties.

The tariffs had been announced as part of efforts to address what Trump described as a “large and serious” U.S. trade deficit. Section 122 allows the U.S. president to impose tariffs of up to 15% for a maximum of 150 days during major international payment imbalances.

Court Restricts Enforcement

The court blocked enforcement of the tariffs against the two companies involved in the case and Washington State. However, the judges stopped short of issuing a nationwide injunction covering all importers.

According to the ruling, the remaining states involved in the lawsuit did not qualify for relief because they were not direct importers of goods affected by the tariffs. Judges Mark A. Barnett and Claire R. Kelly formed the majority opinion, while Judge Timothy C. Stanceu dissented.

Trump Responds To Verdict

Speaking to reporters after the ruling, Trump criticised the decision and said the administration would explore alternative approaches.

The U.S. Justice Department had not issued an official response at the time of reporting. Legal experts expect the administration to challenge the order before the U.S. Court of Appeals for the Federal Circuit.

Tariffs Collected Crossed $8 Billion

According to U.S. government data analysed by small business coalition We Pay the Tariffs, customs authorities collected nearly $8 billion through the Section 122 tariffs in March 2026 alone.

Basic Fun Inc., one of the companies involved in the lawsuit, said it had already paid more than $100,000 in tariff charges since the duties took effect.

The ruling comes months after the U.S. Supreme Court vacated earlier tariffs imposed by Trump under the International Emergency Economic Powers Act (IEEPA). That decision had triggered refund claims linked to nearly $170 billion worth of tariffs.

Trade Policy Uncertainty Continues

The Trump administration is also pursuing fresh trade investigations under Section 301 of the Trade Act related to manufacturing practices and labour concerns involving multiple countries.

The Section 122 tariffs were expected to remain in place until those investigations concluded later this year. The court ruling may now affect the administration’s short-term trade strategy ahead of next week’s scheduled summit between Trump and Chinese President Xi Jinping.

The latest judgment has added further uncertainty around U.S. tariff policy and ongoing legal disputes linked to trade measures imposed in 2026