A federal trade court ruled President Trump’s 10% global tariffs illegal under a 1970s trade law, but limited relief to just two small businesses and Washington state, leaving the duties in place for all other importers while appeals proceed.

Court Delivers Split Decision on Temporary Duties

The U.S. Court of International Trade issued a 2-1 decision Wednesday declaring Trump’s temporary global tariffs unjustified under Section 122 of the Trade Act of 1974. The court blocked the levies only for toy company Basic Fun!, spice importer Burlap & Barrel, and Washington state. The tariffs, set to expire in July, remain enforced against all other importers during any appeal process by the administration.

The New York-based court rejected requests from 24 states, mostly Democrat-led, for a universal injunction blocking the tariffs nationwide. The ruling stated those states lacked standing to seek that broader relief. Washington qualified for protection because the University of Washington, a public research institution, paid the tariffs as an importer. The court found the Section 122 law was not appropriate for the trade deficits Trump cited in his February order.

President Vows Different Approach After Setback

Trump dismissed the decision as the work of two radical left judges and told reporters nothing surprises him with the courts anymore. He indicated his administration would pursue alternative approaches. The Trump administration plans to resurrect broad tariffs on major trading partners using Section 301 of the Trade Act of 1974, which addresses unfair trade practices and has survived numerous legal challenges. Three Section 301 tariff investigations are underway, scheduled for completion in July.

What This Means for Trade Policy

The ruling marks another major setback for Trump’s tariff strategy, coming three months after the Supreme Court struck down his sweeping global tariffs imposed under a national emergencies law. It arrives one week before Trump meets Chinese President Xi Jinping in Beijing to discuss trade tensions. The decision sets up a protracted legal battle over billions of dollars in potential tariff refunds. Trade experts anticipate appeals to the Federal Circuit Court and possibly the Supreme Court. Basic Fun! CEO Jay Foreman called the decision an important win for American companies relying on global manufacturing to deliver safe and affordable products.