Trade Court Rejects Trump’s Global Tariffs

A federal trade court has ruled that President Donald Trump’s 10% global tariffs imposed under Section 122 of the Trade Act of 1974 were not authorized by that law, setting up another legal fight over a tariff policy that could affect import costs for wine, spirits and other goods entering the United States.

The U.S. Court of International Trade issued its decision on May 7, saying the administration had not met the statutory requirements to use Section 122 to impose a temporary surcharge on imports from nearly every country. The ruling came after lawsuits filed by importer plaintiffs and a coalition of states challenged the tariffs soon after they were announced in February. The court found that three importer plaintiffs had standing to sue and granted them summary judgment, along with a permanent injunction blocking collection of the duties from those companies. It dismissed claims brought by several state plaintiffs, saying they had not shown direct harm sufficient to challenge the tariffs.

The Trump administration appealed to the U.S. Court of Appeals for the Federal Circuit, which on May 12 issued an administrative stay that pauses the lower court’s order while the appeal moves forward. That means the tariffs remain in place for now, and importers are still paying them unless and until a higher court says otherwise.

Section 122 allows a president to impose duties of up to 15% for as long as 150 days to address large and serious balance-of-payments deficits. The administration used that authority on Feb. 20, the same day the Supreme Court struck down a separate set of tariffs imposed under emergency powers law. The new tariffs were framed as a temporary global surcharge on imports from almost all countries. The administration later threatened to raise the rate to 15%, though it has not done so.

For importers, including beverage companies that rely on foreign supply chains, the immediate issue is uncertainty. If the appeals court ultimately upholds the trade court’s ruling, only the named plaintiffs would automatically be entitled to refunds unless other importers bring their own cases or customs officials create a broader refund process. That is what has happened in related litigation over other tariffs, where refund procedures have been coordinated through the courts and U.S. Customs and Border Protection.

The trade court’s ruling does not end the administration’s tariff options. Even if Section 122 is ultimately struck down, other authorities remain available, including Section 232 of the Trade Expansion Act and Section 301 of the Trade Act of 1974. Those tools have already been used for duties on steel, aluminum and a range of products from specific countries and industries.

For wine importers, distributors and retailers, the practical effect is that landed costs may continue to swing while the case works through appeals. A tariff that applies broadly across nearly all imports can affect bottles from Europe, South America, Australia and elsewhere, adding pressure to pricing at a time when many beverage businesses are already dealing with higher freight, labor and financing costs.

The Federal Circuit could decide whether Section 122 gives the president authority to impose these duties at all. If it does not, further appeals to the Supreme Court are possible. If it does, importers may still have to wait for separate rulings on whether they can recover duties already paid.