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Posted on 05/07/2026 10:57:59 PM PDT by E. Pluribus Unum
The U.S. Court of International Trade dealt a blow to the 10 percent global import tax that President Donald Trump imposed after losing on tariffs at the Supreme Court.
A specialized federal court in New York delivered a new blow to President Donald Trump’s effort to impose widespread tariffs, ruling against the levies the president imposed after the Supreme Court decision in February that eliminated most of his emergency import taxes.
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Thursday’s 2-1 ruling by a three-judge panel of the U.S. Court of International Trade held that the president’s order imposing a 10 percent global tariff under Section 122 of a 1974 trade law was unlawful. Trump cited the nation’s trade deficit as justification for his latest tariffs. But under the law the president cited, tariffs can be imposed only if the United States is suffering “large and serious” balance-of-payments deficits, which the court said was not the same thing.
The ruling weakens the president on his core economic initiative one week before he is scheduled to meet Chinese leader Xi Jinping in Beijing for talks that will focus on the two nations’ trade relationship. China has been a principal target of Trump’s trade policies, dating to his first term.
“Although this was a split decision, it is a decisive rejection of the president’s use of Section 122 tariffs,” said Timothy Brightbill, a trade attorney at Wiley Rein in Washington.
The court granted a summary judgment in favor of the plaintiffs, Burlap & Barrel, a New York-based online spice retailer, and Basic Fun, a toy company in Florida, as well as Washington state. Several claims by other states were dismissed because they had not paid any Section 122 tariffs.
The ruling marked the second major legal setback for...
(Excerpt) Read more at washingtonpost.com ...
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To hell with the Obama trade court. Let them enforce their edict.
New York garbage.
They are “specialized”. So, they must be right all the time?
It’s the only decision the court could have reached. As a matter of law and a matter of economics, a trace deficit and a balance of payments deficit are not the same. The U.S. isn’t running a balance of payments deficit.
Two judges on a “specialized federal court” in Manhattan get to veto the President on foreign policy?
Wikipedia: The Customs Courts Act of 1980 established the United States Court of International Trade in its current form, granting it jurisdiction over all trade matters and conferring its judges with life tenure. The court has six Obama/Biden judges, two Trump judges, one vacancy, and several judges with senior status.
Exports of goods and services to, and income received from, foreign residents increased $32.4 billion to $1.33 trillion in the fourth quarter, reflecting increases in goods exports and in primary (earned) income receipts.
Imports of goods and services from, and income paid to, foreign residents decreased $16.0 billion to $1.52 trillion, reflecting decreases in primary (earned) income payments and in goods imports.
Net financial-account transactions were –$1.21 trillion in 2025, reflecting net U.S. borrowing from foreign residents. Transactions in 2025 increased U.S. residents’ foreign financial assets by $1.7 trillion and increased U.S. liabilities to foreign residents by $2.90 trillion.
The U.S. net international investment position was –$27.54 trillion at the end of 2025, compared to –$26.54 trillion at the end of 2024. U.S. assets increased $7.24 trillion to a total of $42.96 trillion at the end of 2025, and U.S. liabilities increased $8.24 trillion to a total of $70.49 trillion.
I think the Court got the facts wrong.
“Balance of Payments: Current account balance (credit less debit) for United States”
The IMF says it’s about 3.7% of GDP.
SEC. 122. BALANCE-OF-PAYMENTS AUTHORITY.
(a) Whenever fundamental international payments problems
require special import measures to restrict imports—
(1) to deal with large and serious United States balance-of-payments deficits,
(2) to prevent an imminent and significant depreciation of the dollar in foreign exchange markets, or
(3) to cooperate with other countries in correcting an international balance-of-payments disequilibrium,
the President shall proclaim, for a period not exceeding 150 days
(unless such period is extended by Act of Congress)—
(A) a temporary import surcharge, not to exceed 15
percent ad valorem, in the form of duties (in addition to
those already imposed, if any) on articles imported into the
United States;
(B) temporary limitations through the use of quotas on
the importation of articles into the United States; or
(C) both a temporary import surcharge described in
subparagraph (A) and temporary limitations described in
subparagraph (B).
The authority delegated under subparagraph (B) (and so much of subparagraph (C) as relates to subparagraph (B)) may be exercised
(i) only if international trade or monetary agreements to which the United States is a party permit the imposition of quotas as a balance-of-payments measure, and (ii) only to the extent that the fundamental imbalance cannot be dealt with effectively by a surcharge proclaimed pursuant to subparagraph (A) or (C).
Any temporary import surcharge proclaimed pursuant to subparagraph (A) or (C) shall be treated as a regular customs duty.
(b) If the President determines that the imposition of import restrictions under subsection (a) will be contrary to the national interest of the United States, then he may refrain from proclaiming such restrictions and he shall—
(1) immediately inform Congress of his determination, and
(2) immediately convene the group of congressional official
advisers designated under section 161(a) and consult with
them as to the reasons for such determination.
(c) Whenever the President determines that fundamental inter
national payments problems require special import measures to increase imports—
(1) to deal with large and persistent United States balance-of-trade surpluses, as determined on the basis of the cost-
insurance-freight value of imports, as reported by the Bureau of the Census, or
(2) to prevent significant appreciation of the dollar in foreign exchange markets.
the President is authorized to proclaim, for a period of 150 days (unless such period is extended by Act of Congress)—
(A) a temporary reduction (of not more than 5 percent ad
valorem) in the rate of duty on any article; and
(B) a temporary increase in the value or quantity of arti
cles which may be imported under any import restriction, or a temporary suspension of any import restriction.
Import liberalizing actions proclaimed pursuant to this subsection shall be of broad and uniform application with respect to product coverage except that the President shall not proclaim measures under this subsection with respect to those articles where in his judgment such action will cause or contribute to material injury to firms or workers in any domestic industry, including agriculture, mining, fishing, or commerce, or to impairment of the national security, or will otherwise be contrary to the national interest.
(d)(1) Import restricting actions proclaimed pursuant to subsection (a) shall be applied consistently with the principle of nondiscriminatory treatment. In addition, any quota proclaimed pursuant to subparagraph (B) of subsection (a) shall be applied on a basis which aims at a distribution of trade with the United States approaching as closely as possible that which various foreign countries might have expected to obtain in the absence of such restrictions.
(2) Notwithstanding paragraph (1), if the President determines that the purposes of this section will best be served by action against one or more countries having large or persistent balance-of-payments surpluses, he may exempt all other countries from such action.
(3) After such time when there enters into force for the United States new rules regarding the application of surcharges as part of a reform of internationally agreed balance-of-payments adjustment procedures, the exemption authority contained in paragraph (2) shall be applied consistently with such new international rules.
(4) It is the sense of Congress that the President seek modifications in international agreements aimed at allowing the use of surcharges in place of quantitative restrictions (and providing rules to govern the use of such surcharges) as a balance-of-payments adjustment measure within the context of arrangements for an equitable sharing of balance-of-payments adjustment responsibility among deficit and surplus countries.
(e) Import restricting actions proclaimed pursuant to sub
section (a) shall be of broad and uniform application with respectently with the purposes of this section, that certain articles should not be subject to import restricting actions because of the needs of the United States economy. Such exceptions shall be limited to the unavailability of domestic supply at reasonable prices, the necessary importation of raw materials, avoiding serious dislocations
in the supply of imported goods, and other similar factors. In addition, uniform exceptions may be made where import restricting actions will be unnecessary or ineffective in carrying out the purposes of this section, such as with respect to articles already subject to import restrictions, goods in transit, or goods under binding contract. Neither the authorization of import restricting actions nor
the determination of exceptions with respect to product coverage shall be made for the purpose of protecting individual domestic industries from import competition.
(f) Any quantitative limitation proclaimed pursuant to sub
paragraph (B) or (C) of subsection (a) on the quantity or value, or both, of an article—
(1) shall permit the importation of a quantity or value
which is not less than the quantity or value of such article imported into the United States from the foreign countries to which such limitation applies during the most recent period which the President determines is representative of imports of such article, and
(2) shall take into account any increase since the end of
such representative period in domestic consumption of such article and like or similar articles of domestic manufacture or production.
(g) The President may at any time, consistent with the provisions of this section, suspend, modify, or terminate, in whole or in part, any proclamation under this section either during the initial 150-day period of effectiveness or as extended by subsequent Act of Congress.
(h) No provision of law authorizing the termination of tariff concessions shall be used to impose a surcharge on imports into the United States.
[19 U.S.C. 2132]
https://www.agriculture.senate.gov/imo/media/doc/93-618.pdf
The US has long had serious trade deficits in goods. The trade deficits in goods tend to be partially offset by surpluses in the provision of services.
The net trade deficit puts hundreds of billions of dollars in the hands of foreigners each year.
In turn, these foreigners use the dollars to buy US Treasury debt; US stocks, houses (in California and other states), apartments (in NYC’s Trump Tower and elsewhere), office buildings, and farmland, etc.
Under this system, Americans typically get Chinese chattels that end up in landfills within a decade or two and the Chinese get farmland that lasts forever and real estate that lasts far longer than the chattels.
Under Section 122, if the Chinese and other foreigners buy enough US Treasury and other debt, US stocks, farmland, houses and apartments, and services to offset the massive trade deficits in goods, all is good for Congress.
And if foreigners buy Trump Organization condos, that’s great too.
“(2) to prevent an imminent and significant depreciation of the dollar in foreign exchange markets”
The dollar is down a lot. Those who travel or plan to travel to Europe know this.
The use of “imminent” is rather absurd.
Is a President like Trump or Biden supposed to be more knowledgeable about currency rates than currency traders?
What Congress obviously meant is if the dollar has suffered a negative trend, the President gets to put in a tariff of up to 15%.
Interesting, isn’t it, how many executive branch actions have been deemed illegal or unconstitutional by the courts only since President Trump was sworn into office?
If the law does specify “balance of payments” and not “trade deficit” then the court’s ruling is likely correct.
“Trade” is the exchange of goods and services, or as generally known as imports and exports.
The balance of payments is all transactions, including the purely financial movement of “cash” and capital.
Quite often when the U.S. has had a trade deficit, it has had a surplus on the balance of payments, as many of the dollars earned overseas by our imports was returning in greater amounts as capital inflows to the U.S.
Balance of payments and trade (surplus or deficit) are not the same thing even though they are related.
Trump gets a lot of bad legal advice.
From my Random House Dictionary:
payment
...1.the act of paying...
pay...
v.t. 1. to settle (a debt or obligation) by giving money
2. to give (a certain amount) in exchange for something
3. to give money to (a person or organization), as for goods and services
...
v.i. 9. to give money to acquire something or settle an obligation
....
“SEC. 122. BALANCE-OF-PAYMENTS AUTHORITY.
(a) Whenever fundamental international payments problems
require special import measures to restrict imports—
(1) to deal with large and serious United States balance-of-payments deficits,
(2) to prevent an imminent and significant depreciation of the dollar in foreign exchange markets, or
(3) to cooperate with other countries in correcting an international balance-of-payments disequilibrium,
the President shall proclaim, for a period not exceeding 150 days (unless such period is extended by Act of Congress)—
(A) a temporary import surcharge, not to exceed 15 percent ad valorem”
The critical parts:
“SEC. 122. BALANCE-OF-PAYMENTS AUTHORITY.
(a) Whenever fundamental international payments problems
require special import measures to restrict imports—
....
(2) to prevent an imminent and significant depreciation of the dollar in foreign exchange markets
....
the President shall proclaim, for a period not exceeding 150 days(unless such period is extended by Act of Congress)—
(A) a temporary import surcharge, not to exceed 15 percent ad valorem”
It was enough that the dollar was endangered.
“11 Feb 2026”
“Beijing is signalling new urgency in its push to elevate the yuan”
“WHY NOW? THE SIGNAL AND ITS TIMING
The environment has shifted dramatically since Xi’s speech in 2024 - back then, the dollar was still in a structural bull cycle.
“Since then, the greenback fell roughly 10 per cent in the first half of 2025 - its steepest decline since 1973, analysts noted.
“Liberation Day” tariffs by Trump last year coincided with the dollar’s fall alongside rising market volatility.”
https://www.channelnewsasia.com/east-asia/xi-jinping-yuan-currency-us-dollar-china-5920046
Trump imposed his latest tariff about 10 days later.
they can F off.
Another anti-Trump group out of NY. Sheesh! Dismantle the organization.
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