Court Rules Trump's 10% Global Tariffs Illegal

The U.S. Court of International Trade ruled 2-1 on May 7, 2026, that 10% temporary global tariffs imposed by Donald Trump were invalid and unauthorized by law. The court determined that the administration overstepped its authority under Section 122 of the Trade Act of 1974, stating that routine trade deficits do not constitute the "large and serious balance-of-payments deficits" required to trigger such levies.

These tariffs were implemented on February 20, 2026, as a backup measure after the Supreme Court of the United States struck down broader tariffs imposed under the International Emergency Economic Powers Act. While the current ruling blocks tariff collection and mandates refunds for the state of Washington and two companies—Burlap & Barrel and Basic Fun!—the court declined to issue a universal injunction for all importers.

President Trump criticized the decision, attributing it to "two radical left judges," though he indicated his administration would explore alternative measures to pursue its trade agenda. The U.S. government has since appealed the ruling to the U.S. Court of Appeals for the Federal Circuit. Meanwhile, the U.S. Trade Representative is preparing potential permanent replacements using Section 301 and Section 232 investigations.

The legal instability has caused international ripple effects. The Global Trade Research Initiative advised India to delay concluding a bilateral trade agreement with the U.S., warning that unpredictable policy makes long-term commitments difficult to justify. The conflict coincides with a planned meeting between Trump and Chinese President Xi Jinping in Beijing.