After the U.S. Supreme Court overturned President Donald Trump’s original tariff policy a few months ago, the Federal Trade Court declared that his 10% global tariff was illegal, giving the U.S. government’s economic agenda the latest blow. A divided three-judge panel of the U.S. Court of International Trade in Manhattan on Thursday granted a group of plaintiffs’ request to overturn the tariffs. In addition to small businesses, the plaintiffs include more than 20 states primarily controlled by Democrats.
In February this year, Trump imposed a 10% tariff in accordance with Section 122 of the Trade Act of 1974. This was the first time that this provision was used.
The U.S. Department of Justice notified the Trade Court on Friday that it would appeal the ruling to the U.S. Court of Appeals for the Federal Circuit. The court ruled against the Trump administration in the previous round of tariff disputes.
The court currently only immediately prohibits the government from implementing the tariff policy against the two companies that filed the lawsuit and Washington State, and made it clear that it was not issuing a so-called "general injunction." The collegial panel held that other states did not have the standing to sue because they were not direct importers, but claimed that companies passed on tariff costs so that they had to pay higher prices for goods, thus causing losses.
Asked about the ruling on Thursday night, Trump told reporters: “There were two radical left-wing judges who voted against the tariffs. So it’s no surprise whatever the court rules. Nothing is surprising. Odd. We will always do it another way. Once there is a ruling, we will do it another way.”
It is unclear what this ruling will mean for other importers who have been paying the tariffs involved. Jeffrey Schwab, a lawyer representing small businesses filing suit in the Trade Court, said the next steps would depend on the government's response.