A panel of federal judges on Thursday found President Trump had violated the law when he imposed a 10 percent tariff on most U.S. imports, dealing yet another legal setback to the White House in its efforts to wage a trade war without the express permission of Congress.
In a split ruling, the Court of International Trade found that Mr. Trump had wrongly invoked a decades-old trade law when he applied those duties beginning in February. The president imposed the levies after his previous set of punishing tariffs was struck down by the Supreme Court.
The decision appeared to place, for now, strict new limits on Mr. Trump’s trade powers, which he has wielded aggressively in the hopes of resetting relationships with allies and adversaries, raising new revenue and encouraging more domestic manufacturing.
The next steps in the case are less clear, given that the administration always envisioned the across-the-board tariff as a temporary solution, one that would buy time for Mr. Trump to craft a perhaps more lasting set of higher rates using other legal authorities.
The White House did not immediately respond to a request for comment.
The administration is likely to appeal. But a final loss would require the president to once again pay back any money collected from those duties, which Mr. Trump announced on Feb. 20. A refund process is already underway for the roughly $166 billion collected under Mr. Trump’s prior set of sweeping and illegal tariffs.
After the Supreme Court invalidated those tariffs in February, the White House swiftly moved to revive them using a never-before-used provision in the Trade Act of 1974, known as Section 122. The power allows the White House to apply tariffs up to 15 percent for a maximum of 150 days in response to “large and serious United States balance-of-payments deficits” and situations that present “fundamental international payments problems.”
The two intricate concepts reflect lawmakers’ concerns back when the U.S. dollar was pegged to gold, creating economic risks that the president might need to manage using tariffs. But the dollar is no longer pegged to that commodity, prompting a coalition of states and a group of small businesses to sue the Trump administration this spring, arguing that he did not meet the criteria under law to apply his 10 percent tariff.
