Court of International Trade Strikes Down Trump's 10% Global Tariffs as Unauthorized by Law

A 2-1 panel of the Court of International Trade (CIT) ruled on May 7, 2026 that Trump's 10% universal global tariffs — imposed via Section 122 of the Trade Act of 1974 in the wake of the Supreme Court's February 2026 IEEPA ruling — were 'invalid' and 'not authorized by law.' The ruling came in cases brought by small businesses and the state of Washington, who argued Section 122 (designed to address balance-of-payments deficits) could not be used as a blanket tariff mechanism. This was the second major tariff defeat of 2026, following the Supreme Court's February ruling that the original Liberation Day IEEPA tariffs were unconstitutional — which had required the government to process approximately $166 billion in tariff refunds to over 330,000 businesses via CBP's CAPE portal (56,497 importers registered as of May 1). The Trump administration immediately vowed to appeal the CIT ruling. The White House argued the president retains broad executive authority over trade and that Section 122 explicitly authorizes tariffs in response to balance-of-payments concerns — which the US trade deficit clearly represents. As backup authority, the US Trade Representative had launched new Section 301 investigations against the EU, China, Mexico, and other trading partners, aiming to establish replacement tariff authority before any legal uncertainty resolved. Moody's chief economist Mark Zandi said Trump-era tariffs had done 'significant damage' to the economy — the average US household faced approximately $1,500 in additional annual costs. Core PCE inflation was running at approximately 3% year-over-year, above the Fed's 2% target.