Court ruling against Trump tariffs upholds rule of law 

 
The US Court of International Trade on Thursday ruled 2-1 against tariffs imposed by President Donald Trump, finding a 1970s era law did not provide a basis for the tariffs as the administration had claimed. CEI experts praised the court ruling. 

Iain Murray, CEI senior fellow: 

“The administration’s attempt to claim that a law designed to address a balance of payments problem allowed it to replace its illegal tariff scheme with a blanket 10 or 15 percent tariff has been revealed as just as illegal. American consumers and American businesses have suffered because of this successive torturing of the law. The administration needs to recognize that if it wants blanket tariffs, it should do as the Founders intended and get Congress to agree.” 

Ryan Young, CEI senior economist: 

“The administration’s next step is not obvious. It could appeal the ruling, but higher courts would also likely rule against the tariffs.  

“Since these Section 122 tariffs were set to expire on July 24 anyway, the administration may just go ahead with its original plan to re-enact the stricken tariffs using other statutes like Section 232 of the 1962 Trade Expansion Act and Sections 301 and 201 of the 1974 Trade Act.  

“While tariffs under these provisions survived previous court challenges in President Trump’s first term, that was before the Supreme Court’s major questions and non-delegation doctrines were in play. New lawsuits may have more success.” 

Steve Swedberg, CEI policy analyst: 

“The court’s decision to invalidate the Section 122 tariffs is a welcome check on executive trade authority. Section 122 was intended to address serious international balance-of-payments problems, not serve as a carte blanche for tariffs. 

“Although Section 122 is framed around international payments conditions, the administration’s presidential action in February 2026 to pursue the Section 122 tariffs repeatedly pointed to the US trade deficit as evidence of economic imbalance. But regardless of statutory justification, trade deficits are not the economic problem they are often made out to be. 

“First, the trade deficit is a reflection of Americans purchasing goods and services that enrich their lives. 

“Second, the United States has run a trade deficit for about five decades while maintaining economic growth, rising productivity, and higher living standards. This long-run record undermines the notion that the trade balance is a meaningful indicator of economic distress. 

“Finally, consumption, investment, and government spending account for the vast majority of GDP. Meanwhile, the trade balance is a relatively small component of the overall economy. 

“The court correctly rejected the use of Section 122 under an outdated balance-of-payments framework. Had the court ruled in Trump’s favor, it would have entrenched a trade policy built on a false premise. As long as the ‘trade deficits are harmful’ mindset influences this country’s trade policy, it will be everyday Americans who pay the price.” 

Related analysis: Supreme Court reaffirms that tariff power belongs to Congress, not the president