A U.S. trade court has dealt another major setback to the Trump administration’s tariff policies, ruling that a 10% global tariff imposed under Section 122 of the Trade Act of 1974 was unlawful. The decision could limit the administration’s ability to impose future tariffs while increasing pressure from businesses seeking refunds and legal relief.
What Happened
According to a report by CBS News, the U.S. Court of International Trade (CIT) sided with 24 states and businesses challenging the legality of tariffs introduced by President Donald Trump in February 2026.
The three-judge panel ruled that the temporary 10% global tariff imposed under Section 122 was “unlawful” and harmful to businesses. The ruling follows an earlier Supreme Court decision that struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA).
Legal and trade experts say the decision represents another major judicial obstacle for the administration’s broader trade agenda.
Key Details of the Court Ruling
Section 122 Tariffs Challenged
The case focused specifically on tariffs implemented under Section 122 of the Trade Act of 1974, which permits the president to impose temporary duties for up to 150 days to address balance-of-payments concerns.
Trade experts noted that the ruling currently applies only to a limited group of plaintiffs, including two businesses and the state of Washington.
Despite the court decision, most importers are still required to pay the 10% tariff on imported goods while the administration considers its next legal steps.
Billions in Potential Refunds
The ruling adds to the financial fallout from previous tariff cases. The federal government reportedly owes importers an estimated $175 billion in tariff refunds plus interest tied to earlier IEEPA-related rulings.
U.S. Customs and Border Protection has already launched a refund claims portal for eligible importers.
Trade attorney Lizbeth Levinson said more companies may now pursue legal action to recover tariff payments, especially businesses that have paid significant import duties.
Impact on Businesses
Businesses Still Paying Tariffs
Although the ruling is significant legally, trade analysts say most businesses will not see immediate operational changes.
Blake Harden, a trade policy expert at Ernst & Young, told CBS News that businesses should continue operating under the current tariff framework for now because the Trump administration is expected to appeal the ruling quickly.
Importers are also being advised to carefully track all Section 122 duties paid in case additional refund opportunities become available later.
Economic and Trade Concerns
The ruling introduces additional uncertainty for companies dependent on imported goods, especially manufacturers and retailers already facing rising supply chain costs.
The Trump administration has consistently defended tariffs as necessary tools for protecting American industries, generating federal revenue, and strengthening trade negotiations.
Readers following broader economic developments can also explore Trump steel and aluminum tariffs support and Trump economy and Iran war impact for related coverage on trade and economic policy.
What Could Trump Do Next?
Shift Toward Section 301 Investigations
Trade analysts believe the administration may increasingly rely on Section 301 of the Trade Act of 1974, which allows the U.S. Trade Representative to investigate and respond to unfair foreign trade practices.
Unlike Section 122, Section 301 requires formal investigations before tariffs can be imposed.
Experts say the administration has already launched investigations involving dozens of countries and may attempt to build a more legally durable tariff framework through those actions.
More Legal Challenges Likely
Despite that strategy, economists warn that Section 301 tariffs could also face future legal scrutiny.
Capital Economics economist Stephen Brown stated that the latest court decision highlights the growing judicial resistance the administration faces when expanding tariff authority.
The ruling could complicate efforts to fully replace revenue lost from tariffs previously invalidated by the courts.
What Happens Next
The Trump administration is expected to appeal the Court of International Trade’s ruling while continuing to defend its trade policies publicly.
For businesses, the immediate environment remains uncertain. Companies importing goods into the United States may continue paying tariffs in the short term while monitoring ongoing court battles and possible refund opportunities.
The case also signals that future U.S. tariff policy could face stronger judicial oversight, potentially reshaping how future administrations use executive trade powers.
The Court of International Trade ruled that Trump’s 10% global tariff under Section 122 was unlawful and harmful to businesses.
Some businesses may qualify for refunds if courts continue overturning tariff policies and additional claims are approved.