Accountancy Slice

North America

A U.S. federal trade court has ruled that President Donald Trump unlawfully used Section 122 of the Trade Act of 1974 to impose 10% global tariffs introduced earlier this year after the Supreme Court blocked his broader worldwide tariff regime. The divided three-judge panel at the U.S. Court of International Trade found that the statute did not give the president authority to implement the tariffs in the manner proposed, with two judges ruling in favor of the plaintiffs and one dissenting. The court barred the administration from collecting the tariffs from Washington state and the two companies that brought the legal challenge, spice importer Burlap & Barrel and toy maker Basic Fun!, although the ruling does not currently apply nationwide. Legal experts said the decision nevertheless creates an important precedent that other importers could use to seek similar relief. The tariffs had been introduced under Section 122, a Nixon-era provision allowing temporary import surcharges of up to 15% in response to serious balance-of-payments issues. Critics argued the law was never intended to support broad modern tariff policies tied to long-running trade deficits. The Trump administration is expected to appeal the decision.