US trade court weighs legality of Trump 10% global tariff

A U.S. trade court on Friday will consider the legality of a 10% global import tax imposed by the Trump administration, which several states and small businesses say sidesteps a U.S. Supreme Court ruling that invalidated most of Trump's previous tariffs.

A group of 24 mostly Democratic-led states and two small businesses sued the Trump administration to stop the new tariffs, which went into effect on February 24. A three-judge panel of the U.S. trade court is set to hear arguments in the cases at 10 a.m. ET (1400 GMT).

Trump has made ​tariffs a central pillar of his foreign policy in his second term, claiming sweeping authority to issue tariffs without input from Congress. The Trump administration has said that global tariffs are a legal and appropriate response to a persistent trade deficit caused by the fact that the U.S. imports more goods than it exports.

Trump imposed the new tariffs under Section 122 of the Trade ​Act of 1974, which authorizes duties of up to 15% for up to 150 days on imports during “large and serious United States balance-of-payments deficits” or to prevent an imminent depreciation of the U.S. dollar. 

The states and small businesses argue that the Trade Act's tariff authority is meant only to address short-term monetary emergencies, and they say that routine trade deficits do not match the economic definition of “balance-of-payments deficits," according to the two lawsuits filed in the New York-based U.S. Court of International Trade.  

Trump announced the new tariffs on February 20, the same day the Supreme Court handed Trump a stinging defeat when ⁠it struck down a broad swath of tariffs he had imposed under the International Emergency Economic Powers Act (IEEPA), ruling that the law did not give him the power he claimed.

No U.S. president before Trump had used either IEEPA or Section 122 of the 1974 Trade Act to impose tariffs. The two lawsuits do not challenge other Trump tariffs made under more traditional legal authority, such as recent tariffs on steel, aluminum and copper imports.

(Reporting by Dietrich Knauth; Editing by Noeleen Walder and Lisa Shumaker)