Trump’s invocation of Section 122 contradicted the statute’s plain wording and extended executive authority beyond the narrow power expressly granted by Congress.
Donald Trump’s tariffs have once again been ruled unlawful.
A triad of judges from the U.S. Court of International Trade determined on Thursday evening that the 10 percent “global tariff” was illegal. He implemented those duties in February, mere hours after the U.S. Supreme Court blocked his bid to rely on emergency powers to impose a sweeping set of tariffs on most imports.
The tariffs were enacted under Section 122 of the Trade Act of 1974, which permits presidents to impose temporary duties in response to “large and serious United States balance-of-payments deficits.”
As Reason and other observers noted at the time, the United States does not suffer a balance-of-payments deficit — a condition fundamentally different from the trade deficit the Trump administration sought to address with the tariffs.
That assessment was borne out by the CIT, which ruled Thursday that the president cannot impose tariffs under Section 122 without that prerequisite.
“Nowhere does [Trump’s executive order imposing the tariffs] identify balance-of-payments deficits within the meaning of Section 122 as it was enacted in 1974,” the judges concluded. Because of that, the executive order “is invalid, and the tariffs
imposed on Plaintiffs are unauthorized by law.”
The lawsuit challenging those tariffs was brought by the Liberty Justice Center on behalf of several small businesses.
“This ruling is a major victory for small businesses like ours that depend on fair and predictable trade policy. These tariffs created real challenges for our company and for the farmers we partner with around the world,” Ethan Frisch and Ori Zohar, co-founders and co-CEOs of Burlap & Barrel, an online spice retailer, said in a statement provided by the Liberty Justice Center. “Today’s decision helps ensure that businesses like ours are not unfairly burdened by unlawful trade restrictions.”
The Trump administration will have a chance to appeal Thursday’s ruling. However, the prospects for success seem slim, given the fact that Trump’s use of Section 122 ignores the plain language of the law and invokes a broad executive power where Congress clearly provided a narrow one.
The loss also likely means the Trump administration will once again have to refund revenue collected from illegal tariffs.
With this latest defeat, Trump has now racked up five consecutive losses in tariff-related cases during his second term. The previous “emergency” tariffs were ruled unlawful four different times: by the CIT, by a federal district court, by a federal appeals court, and, ultimately, by the U.S. Supreme Court.
Perhaps Trump will finally grasp the point. The president does not possess unchecked, unilateral power to impose tariffs for any reason and at any moment. Thursday’s ruling stands as another victory for the rule of law.
