President Donald Trump’s ambitious trade policy has suffered another major legal defeat. A US Federal Trade Court (US Court of International Trade) has struck down the 10 percent global tariff imposed by the President, declaring it ‘illegal’ and effective immediately. A three-judge bench issued the 2-1 majority ruling, stating that the administration abused its powers under Section 122 of the Trade Act of 1974. The court clarified that the import duty imposed by the President was not only unconstitutional but also violated the legal procedures that govern trade balances. This marks the second major legal blow to the Trump administration in three months, increasing uncertainty in global markets and international trade relations.
The case originated when the US Supreme Court rejected Trump’s previous ‘Liberation Day’ tariffs in February 2026, ruling that the President does not have the authority to arbitrarily impose taxes under national emergency laws. Immediately after that loss, President Trump declared a 10% global tariff under Section 122 as a ‘backup plan,’ describing it as ‘unavoidable’ for the protection of the US economy. However, the Federal Court argued in its latest ruling that the United States is not facing a ‘Balance of Payments’ crisis, which was the required basis for invoking that specific section. The court also ordered the refund of tariff amounts, with interest, to all companies and importers who had filed petitions against the decision.
The White House has expressed strong indignation at the court’s decision, calling it a ‘strike against the interests of American workers.’ President Trump has indicated that his government will appeal the decision to a higher court. Economic experts believe this court order will provide significant relief to international trade partners who have been under the pressure of the US trade war for several months. However, market analysts warned that a prolonged legal battle could maintain instability in the import-export sector. The impact was also felt on Wall Street, where stocks of companies linked to global trade saw significant fluctuations. The world’s attention is now on whether the Trump administration will seek a new legislative path or soften its tariff policy.
