Court of International Trade to Hear Challenges to Trump Section 122 Tariffs After Supreme Court IEEPA Defeat
A three‑judge panel at the U.S. Court of International Trade in Manhattan will hear arguments Friday in two lawsuits challenging President Donald Trump’s new global tariffs imposed under Section 122 of the Trade Act of 1974, his backup strategy after the Supreme Court struck down his earlier "Liberation Day" tariffs under the International Emergency Economic Powers Act in a 6–3 ruling on Feb. 20, 2026. The first case, brought by a coalition of 24 states, and a second filed on behalf of a spice importer and a toy manufacturer represented by the Liberty Justice Center, argue that Section 122 only permits temporary, uniform tariffs to address short‑term balance‑of‑payments crises — not the trade deficit and broader economic aims Trump cites — and that the president is again usurping Congress’s constitutional taxing power. Trump imposed a blanket 10% Section 122 tariff immediately after the Supreme Court decision and publicly signaled he might raise it to 15%, though he has not done so yet. The Justice Department counters that Congress has long delegated presidents broad authority to manage foreign trade and tariffs in response to international conditions, but critics are highlighting DOJ’s own earlier appellate filing in the IEEPA case that suggested Section 122 was not a viable tool for this kind of trade emergency as evidence the administration is stretching the law. The case is being watched closely by trade lawyers, businesses and state governments online as a potential next major test of how far presidents can go in unilaterally reshaping U.S. tariff policy without new legislation, with many warning that another judicial rebuke could force a wholesale rethink of Trump’s tariff‑first economic strategy.
📌 Key Facts
- The Supreme Court on Feb. 20, 2026, in a 6–3 decision, invalidated most of President Trump’s IEEPA-based 'Liberation Day' tariffs, ruling he lacked authority to impose them under that statute.
- Immediately after that ruling, Trump imposed new global tariffs under Section 122 of the Trade Act of 1974 at a 10% blanket rate and publicly suggested he might raise them to 15%.
- On Friday, a three‑judge panel of the U.S. Court of International Trade in Manhattan will hear two challenges to those Section 122 tariffs: one from 24 states and another from small businesses represented by the Liberty Justice Center.
- Plaintiffs argue Section 122 is limited to temporary tariffs addressing 'fundamental international payments problems' or balance‑of‑payments crises, not trade deficits, and say Trump’s move again violates separation of powers by usurping Congress’s taxing authority.
- The Trump administration defends broad presidential authority over foreign trade under Section 122, even though DOJ previously suggested in an appellate brief in the IEEPA litigation that Section 122 would not be a viable basis for Trump’s tariff program.
📊 Relevant Data
The U.S. goods and services trade deficit was $57.3 billion in February 2026, an increase of 4.9% from January 2026.
US trade deficit widens in February as imports offset record exports — Reuters
U.S. consumers and importers bear approximately 96% of the burden from the 2025 tariffs, with minimal pass-through to foreign exporters.
Americans pay almost entirely for Trump's tariffs — Kiel Institute for the World Economy
Tariffs disproportionately burden lower-income Americans, as they spend a larger share of their income on imported goods subject to tariffs.
The Hidden Burden: How Tariffs Hurt Marginalized Communities and Lower-Income Americans — US Resist News
Black Americans face disproportionate economic strain from tariffs, with higher financial burdens including elevated gas prices in affected areas.
Black Americans face economic strain from Trump's tariffs — The Washington Informer
Section 122 of the Trade Act of 1974 has never been used by a U.S. president to impose broad import tariffs prior to 2026.
Section 122 of the Trade Act of 1974 Isn't for Trade Deficits — Yale Journal on Regulation
The U.S. trade deficit narrowed by 54.8% year-to-date through February 2026 compared to the same period in 2025, driven by increased exports.
U.S. International Trade in Goods and Services, February 2026 — Bureau of Economic Analysis
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