The Volokh Conspiracy

Mostly law professors | Sometimes contrarian | Often libertarian | Always independent

About The Volokh Conspiracy Editorial Independence Who we are Books Volokh Daily Email Archives Search DMCA RSS

Tariffs

US Court of International Trade Rules Against Trump's Section 122 Tariffs

The 2-1 decision concludes Trump's massive new tariffs are illegal because there is no "balance of payments deficit" of the kind needed to authorize them.

Ilya Somin | 5.7.2026 5:46 PM

NA

Today, the US Court of International Trade issued an important ruling striking down Donald Trump's massive Section 122 tariffs, imposing 10% tariffs on a vast range of imports from countries around the world. The ruling is a crucial decision protecting the constitutional separation of powers and blocking an extremely harmful policy. The ruling addressed two consolidated lawsuits challenging the tariffs - one  filed by the Liberty Justice Center  (the same public interest group that I worked with on the earlier case that led to the invalidation of Trump's  IEEPA tariffs by the Supreme Court) on behalf of two importers, and one brought by 24 state governments led by the state of Oregon.

Section 122 of the Trade Act of 1974 authorizes the president to impose up to 15% tariffs for up to 150 days in response to "fundamental international payments problems" that cause "large and serious United States balance-of-payments deficits" or "an imminent and significant depreciation of the dollar," or create a need to cooperate with other countries in addressing an "international balance-of-payments disequilibrium." Today's 2-1 decision rests primarily on the ground that the government failed to prove that there is any balance-of-payment deficit of the kind required by the statute:

Rather than identifying "balance-of-payments deficits" as that term was intended
in 1974, the [President's] Proclamation relies upon current account deficits, and a discussion of "a large and serious trade deficit." Proclamation No. 11012 ¶ 6; see also id. ¶ 7 (referring to deficits concerning the balance of goods and services as well as the balances on primary income and secondary income, all of which are part of the current........

© Reason.com