A U.S. federal court has cast doubt on the latest round of global tariffs imposed by the White House, ruling that the Trump administration lacked legal justification for the replacement duties enacted earlier this year.
The 2-1 decision by the U.S. Court of International Trade in New York on Thursday declared that the 10% across-the-board tariffs are "invalid" and "unauthorized by law" under the Trade Act of 1974, according to multiple reports.
Legal Basis Questioned
The Trade Act permits a president to impose tariffs of up to 15% on all imports without congressional approval, but only if specific conditions are met. The court found that those thresholds were insufficiently satisfied in this instance, as reported by CNN.
However, the ruling only exempts the plaintiffs—the State of Washington, spice company Burlap & Barrel, and toy company Basic Fun!—from paying the levies and entitles them to refunds, according to The Associated Press.
Reaction from Affected Companies
"We fought back today and we won and we're extremely excited," Basic Fun! CEO Jay Foreman told reporters on Thursday, via The Associated Press.
For all other importers, the tariffs will remain in place until July, CNN reported, though the White House is expected to appeal the decision.
It remains unclear how many Canadian companies could be affected, as industry-specific tariffs continue to apply.
Another Setback for Trump
This ruling marks the latest legal setback for Trump's tariff policy. Previously, the U.S. Supreme Court struck down sweeping duties imposed under the 1977 International Emergency Economic Powers Act (IEEPA), which the White House had used to declare a national emergency.
Trump called that Supreme Court decision "deeply disappointing" and "ridiculous," and accused the justices of being "very unpatriotic and disloyal to our Constitution." In response, he imposed the 10% tariffs that were invalidated on Thursday.
The U.S. Court of International Trade also ruled in March that companies that paid tariffs under the IEEPA are legally entitled to refunds, after the U.S. government collected approximately $134 billion US in duties last year alone.
— With files from the Toronto Sun and The Associated Press
