America’s President Donald Trump has once again suffered a major setback in the court. The US Trade Court declared the 10% global import duty imposed by the Trump administration illegal, declaring it illegal. The court clearly said that these tariffs imposed by citing the trade law of the 1970s were not legally justified.
This decision has come at a time when the Trump administration is facing continuous legal challenges regarding its trade policy. On February 24, 24 states and many small traders had approached the court against this new import duty imposed on goods coming to America from all over the world.
The court rejected the argument of the Trump administration
Hearing the case, the International Trade Court gave its verdict with a majority of 2-1. The court said that the President has misused Section 122 of the Trade Act of 1974. In the petition filed by the states, it was said that the Trump administration took this step to avoid the decision of the Supreme Court, in which the old heavy tariff imposed in 2025 was canceled as unconstitutional.
What does Section 122 say?
The court made it clear in its decision that under Section 122, the President can impose duty only in special circumstances. This provision applies when the country is facing a serious balance of payments deficit or there is a need to prevent a sharp decline in the value of the dollar.
The court has directed the government to comply with this decision within five days and return the amount to the importers who have paid this tax.
No impact on steel, aluminum and auto sectors
It was also made clear in the decision that the tariffs imposed on steel, aluminum and automobile sectors will continue for the time being. The court said that these charges are not included in the scope of this legal challenge and the previous decision of the Supreme Court.
What argument did the Trump administration give?
The Trump administration, while defending its decision in the court, had said that America’s annual trade deficit has reached $1.2 trillion and the current account deficit has reached 4% of the country’s GDP. However, economists and experts rejected this argument and said that America is not going through any balance of payments crisis. In such a situation, there is no strong legal basis for these import duties.
What will happen next now?
After this decision, the US Justice Department can challenge it in the US Court of Appeals. Currently, these 10% global tariffs were to remain in effect till July 24, but this decision of the court has given a big blow to the trade strategy of the Trump administration.
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