Quick Facts

• U.S. Court of International Trade ruled 2-1 that Trump’s global 10% tariffs violate Section 122 of the Trade Act of 1974
• Court ordered refunds plus interest for Washington state and two businesses that sued, but did not strike down tariffs universally
• More than 3,000 businesses including FedEx, Costco and Toyota have sued seeking $130-175 billion in potential refunds

The U.S. Court of International Trade ruled Thursday that President Trump’s global 10% tariffs are unlawful. The three-judge panel concluded 2-1 that the Trump administration misinterpreted the law used to justify the sweeping trade measures.

In its 53-page ruling, the court called the Section 122 tariffs “unlawful” and noted they brought “economic harm” to plaintiffs. The panel ordered the administration to stop charging tariffs for Washington state and two businesses that sued. It also mandated refunds plus interest for all tariffs paid by those three plaintiffs.

The court did not issue a universal injunction striking down the tariffs entirely. The ruling affects only the specific plaintiffs in the case.

Trump implemented the global tariffs using Section 122 of the Trade Act of 1974 after the Supreme Court struck down his previous “Liberation Day” tariffs in February. The 10% across-the-board surcharge is set to expire July 24.

Section 122 allows the president to impose temporary tariffs up to 15% for 150 days to address “large and serious” balance-of-payments deficits. The court ruled Trump lacked authority because the law requires an actual balance-of-payments deficit, not the trade deficit cited in the White House proclamation.

“Rather than identifying ‘balance-of-payments deficits’ as that term was intended in 1974, the [President’s] Proclamation relies upon current account deficits, and a discussion of ‘a large and serious trade deficit,’” the court wrote.

The Trump administration argued the president should get broad discretion in determining what qualifies as a balance-of-payments deficit. The court rejected this, saying it would give “virtually unlimited power to impose tariffs” and create constitutional problems.

Jay Foreman, CEO of toymaker Basic Fun!, called the decision “an important win for American companies that rely on global manufacturing.” Aaron Powell, CEO of Bunch Bikes, reported the tariffs had an “existential” impact on his business, causing a net loss exceeding $200,000 in 2025.

More than 3,000 businesses have sued the Trump administration seeking refunds. High-profile plaintiffs include FedEx, Costco, Skechers, Revlon, Toyota and Nintendo of America. Potential refunds total $130 billion to $175 billion.

Trump responded to the ruling by calling the majority judges “radical left” and suggesting his tariff strategy would continue. “We always do it a different way,” he told reporters.

The administration will likely appeal the decision. Trade lawyer Tim Brightbill noted there is already a “plan C” through Section 301 investigations currently underway targeting 16 economies including China and the European Union.

This marks the second time courts have found Trump’s tariff regime illegal. The practical impact remains limited as the tariffs expire in July and replacement measures are being prepared through other legal authorities.

Read more: Trump’s Latest 10% Tariffs Found Unlawful by US Trade Court