NEW YORK — The U.S. Court of International Trade on Thursday ruled that President Trump’s 10% global tariff under the Trade Act of 1974, imposed after the Supreme Court invalidated the administration’s broad “Liberation Day” tariff regime, is illegal — but stopped short of a nationwide injunction against the tariff.
In a two-to-one decision, a three-judge panel declared Trump’s Proclamation No. 11012 of Feb. 20, titled “Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems,” to be “invalid as contrary to law.”
The majority opinion in the ruling states that the president’s proclamation fails to make a case that the required conditions for invoking Section 122 have been satisfied, and that the administration therefore cannot lawfully impose the import surcharges. According to the panel majority, the administration misinterpreted the statute and misconstrued the intent of Congress in enacting it.
As a result, the judges wrote, “Proclamation No. 11012 is invalid, and the tariffs imposed on Plaintiffs are unauthorized by law.”
The judges declined, however, to issue a universal injunction against enforcement of the tariff, ruling only against its imposition on specific importers and in the state of Washington, which the court found to have standing in the matter due to already demonstrable impact there.
The complaints by the other 23 states in the lawsuit were dismissed without prejudice for lack of standing, but future litigation appears certain in the wake of the overall finding against the proclamation.
As XBIZ reported last year, the Trump administration’s sharp escalation of import taxes, especially on goods from China, had strong negative effects on the sex toy business.
In May 2025, the U.S. Court of International Trade ruled that President Trump exceeded his authority by imposing the tariff regime. The administration appealed to the U.S. Court of Appeals for the Federal Circuit, which granted a temporary stay of the trade court’s decision. In February, however, the Supreme Court rejected Trump’s claim that the International Emergency Economic Powers Act (IEEPA) of 1977 granted him the authority to impose the broad regimen of import levies.
As XBIZ reported in April, U.S. Customs and Border Protection has already begun the process of refunding duties paid under the overturned tariffs, via an online tool for submitting refund claims.
The SCOTUS decision prompted the president to announce a new tariff strategy as a workaround: invoking another relatively obscure law, Section 122 of the Trade Act of 1974. Under that law, the president can levy tariffs for up to 150 days without congressional approval.
Shortly thereafter, 24 U.S. states, including Washington, sued the Trump administration in an effort to block that workaround, ultimately resulting in the Thursday's ruling.
Industry attorney Corey Silverstein explained, “The decision blocks the 10% tariff for certain businesses and Washington state, but does not yet automatically end tariffs nationwide for everyone. The administration is expected to appeal, so legal uncertainty remains.”
The court’s decision acknowledges, “Whether the court has authority to issue universal injunctive relief is, at present, an open question.”
Update: On Friday, May 8, the Trump administration filed an appeal of the court's decision. The appeal will be heard by the United States Court of Appeals for the Federal Circuit.
