Tipsheet

Federal Court Strikes Down Trump's 10 Percent Global Tariffs

Scott McClallen
Scott McClallen  |  May 07, 2026 7:30 PM

A U.S. trade court has ruled against President Donald Trump’s 10 percent global tariffs.

The U.S. Court of International Trade ruled 2-1 that a 1970s law doesn’t allow the president to enact sweeping tariffs worldwide.

The State of Oregon, a spice company called Burlap and Barrel, and a toy company named “Basic Fun Inc.” challenged the tariffs.

Article 1, Section eight of the U.S. Constitution gives Congress the power to levy duties, collect taxes, and more.

Section 122 of the Trade Act of 1974 gives some of that power to the president. It allows the president to impose temporary surcharges up to 15 percent.

On Feb. 20, Trump announced a 10 percent tariff on imports effective on Feb. 24 through July 24. 

Trump justified the tariffs because the U.S. runs a trade deficit with many other countries.

The plaintiffs claimed that the president doesn’t have the authority to invoke those tariffs “because large and serious balance-of-payments deficits cannot occur in a floating exchange rate monetary system,” according to the 88-page ruling.

The plaintiffs suffered economic harm, price erosion, a loss of goodwill, damaged reputation, and more, the court ruled.

“Finally, considering the balance of hardships, a remedy in equity is warranted, and the public interest would be served by a permanent injunction,” the ruling said.

The U.S. Supreme Court has also ruled against Trump’s tariffs. That ruling ordered the U.S. to refund tariffs, which is expected to cost about $166 billion.  

Trump has viewed tariffs as a national security tool. He says that tariffs encourage domestic manufacturing instead of shipping jobs overseas. 

Since Trump's most recent election, manufacturing has boomed in the U.S., according to data from the St. Louis Federal Reserve. Much of the Rust Belt – Michigan, Ohio, Pennsylvania, Indiana, and Illinois –  relied on manufacturing jobs and was decimated after those jobs moved to China and other countries that use slave or cheaper labor. 

Trump says that his tariffs brought better deals for U.S. workers and companies that want to build items in the U.S. again. Manufacturing accounted for more than 30 percent of jobs in 1960 but has since plummeted, taking away blue-collar jobs from many in the Midwest. 

The ruling is bad news for manufacturing workers in the U.S. 

Trump previously said he’s secured $18 trillion in investments through tariffs, which would create more jobs and raise wages. For example, auto maker Stellantis says that it will invest $13 billion in auto plants across the Midwest. 

His tariffs triggered many countries to renegotiate their trade agreements with the U.S to give us more favorable trade agreements.


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