A U.S. trade court will hear on Friday whether the 10% global import tariffs imposed by the Trump administration are legal. Several states and small businesses said the move circumvented a U.S. Supreme Court ruling that had invalidated most of Trump's previous tariff policies.
Twenty-four Democratic-led states and two small business groups sued the Trump administration to halt the new tariffs that took effect on February 24. A three-judge panel of the US Court of International Trade will hear arguments in the case at 10am ET (14:00 GMT).
Trump has made tariffs a central pillar of his foreign policy during his second term, asserting broad authority to impose tariffs unilaterally without congressional approval. The Trump administration says the global tariffs are a legal and appropriate measure to address the ongoing trade deficit caused by the United States importing more than it exports.
Trump imposed new tariffs based on Section 122 of the Trade Act of 1974. This provision authorizes the imposition of tariffs of up to 15% on imported goods for a maximum period of 150 days when the United States encounters a "huge and serious balance of payments deficit" or to prevent an imminent devaluation of the U.S. dollar.
The states and small businesses argued that tariff authority under the Trade Act only applies to short-term monetary emergencies and that regular trade deficits do not meet the economic definition of a "balance of payments deficit," according to two complaints filed with the U.S. Court of International Trade in New York.
Trump announced new tariffs on February 20. On the same day, the Supreme Court issued a major ruling against him, rejecting the large-scale tariffs he had imposed under the International Emergency Economic Powers Act (IEEPA), ruling that the law did not give him the tariff authority he claimed.
Before Trump, no U.S. president had used the International Emergency Economic Powers Act or Section 122 of the Trade Act of 1974 to impose tariffs. The two lawsuits do not challenge other tariffs Trump has imposed under more traditional legal authority, such as recent tariffs on imported steel, aluminum and copper.