The U.S. Court of International Trade on Friday held oral arguments in a lawsuit challenging President Donald Trump’s temporary global tariffs, a dispute that follows the Supreme Court’s Feb. 20 decision striking down his preferred approach for imposing broader tariff measures.
The legal challenge targets the tariff authority Trump used after the Supreme Court ruled that the International Emergency Economic Powers Act did not authorize tariffs aimed at countering national emergencies. In the earlier round, Trump invoked IEEPA to impose what were described as sweeping taxes on imports, tied to the administration’s interpretation of the trade deficit as a national emergency.
In this new case, the question turns to whether Trump’s fallback authority under the Trade Act of 1974 permits the president to impose tariffs to address trade deficits. The trade court, a specialized court in New York, heard arguments from both the plaintiffs and the government for more than three hours as the three-judge panel questioned lawyers on key statutory terms.
The plaintiffs’ challenge centers on Section 122 of the Trade Act of 1974, which allows the president to impose global tariffs of up to 15% for 150 days. After the Supreme Court struck down the IEEPA-based tariffs, Trump announced new 10% tariffs under Section 122 and said he would raise them to the maximum 15%, though the tariffs are still scheduled to end on July 24.
In its questions to both sides, the panel focused on how the law’s language should be read, including what “balance-of-payments deficits” meant when Congress adopted the provision and what the term could mean in the modern context, according to the arguments presented during the hearing.
Justice Department filings surfaced as part of the back-and-forth over statutory meaning. The article said Trump’s own Justice Department previously argued in a court filing that the IEEPA route was needed because Section 122 “did not have any obvious application” to fighting trade deficits, describing trade deficits as “conceptually distinct” from what the government described as “payments problems.”
The hearing also highlighted another point of tension: the trade court’s own prior decision when it struck down the IEEPA tariffs. The article said that in that earlier ruling, the trade court had written that Trump did not need IEEPA because Section 122 was available to address trade deficits, setting up a fresh fight over how the same provision should be interpreted.
Judges also tested how the provision fits with the history and purpose described in the case, including Section 122’s reference to “fundamental international payments problems.” The article said critics view that language as outdated because it emerged from a period when the U.S. dollar was tied to gold, a system that has since changed.
One attorney for the plaintiffs described the hearing as searching for Congress’s intent when it passed Section 122, saying he thought the judges asked tough questions of all sides. Jeffrey Schwab, senior counsel and director of litigation for Liberty Justice Center, said he believed the panel was trying to determine what Congress meant when it passed the section.
Ryan Majerus, a trade lawyer and partner at King & Spalding, said he expected the challengers to lose, arguing that the trade court’s judges are likely to defer to the president and allow the Section 122 tariffs to stand. Majerus said he did not see the judges “sticking their neck out on this one,” noting that the tariffs are in place for a limited period.
Attorneys for the states also pressed for speed, seeking another relatively prompt ruling. Dan Rayfield, attorney general of Oregon and a state plaintiff, said, “We are hopeful to get a result sooner than later,” adding that when the president continues what the challengers view as an unlawful action and seeks to take money from Americans’ pockets, they want a quick response from the courts.
As the hearing underscored, the case is ultimately about interpretive boundaries—how far a time-limited statute can reach when the government and challengers disagree over whether trade deficits fall within the old statutory framework for “payments problems.”