NEW YORK — The U.S. trade court ruled Thursday against President Donald Trump's latest 10% global tariffs, finding they were not justified under a 1970s trade law, however the court only blocked the levy on two small businesses and the state of Washington.
The U.S. Court of International Trade ruled in favor of the two businesses and Washington state that challenged the tariffs, which took effect on February 24. The ruling was 2-1, with one judge saying it was premature to grant victory to the small business plaintiffs.
The White House did not immediately respond to a request for comment.
The trade court declined to issue an injunction that blocks the tariffs for all importers, rejecting a request from a group of 24 states, mostly led by Democrats, saying those states did not have standing to ask for that relief.
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The court ruled that most of the states that sued, with the exception of Washington, were not importers who paid or could have paid the Section 122 tariffs. Washington submitted evidence that it paid tariffs through the University of Washington, a public research institution.
The duties will remain in place for other importers during a government appeal.
Cargo ships sail Oct. 17 in Hong Kong, China.
The two small businesses, toy company Basic Fun! and spice importer Burlap & Barrel, argued the new tariffs were an attempt to sidestep a landmark U.S. Supreme Court decision that struck down the Republican president's 2025 tariffs imposed under the International Emergency Economic Powers Act.
In his February order, Trump invoked Section 122 of the Trade Act of 1974, which allows for duties for up to 150 days to correct serious "balance of payments deficits" or head off an imminent depreciation of the dollar.
Thursday's court ruling found the law was not an appropriate step for the kinds of trade deficits Trump cited in his February order.
“This decision is an important win for American companies that rely on global manufacturing to deliver safe and affordable products," said Jay Foreman, CEO of Basic Fun! "Unlawful tariffs make it harder for businesses like ours to compete and grow.”
“We are encouraged by the court’s recognition that these tariffs exceeded the President’s authority. This ruling brings needed clarity and stability for companies navigating global supply chains," he said in a statement.
The Trump administration argued that a serious balance-of-payments deficit existed in the form of a $1.2 trillion annual U.S. goods trade deficit and a current account deficit of 4% of GDP.
Some economists and trade lawyers argue the U.S. is not on the cusp of a balance-of-payments crisis, making the new duties vulnerable to a legal challenge.
