Just two months after the Supreme Court declared the Trump administration’s tariffs unconstitutional, the president’s backup plan — tariffs under a different statute — will face its own legal challenge in a Manhattan court.
A three-judge panel in the Court of International Trade will hear arguments on Friday in a pair of cases challenging the legality of the president’s workaround — Section 122 tariffs — put into place after his loss in the country’s top court.
Section 122 authorizes the president to impose temporary import tariffs or other trade restrictions for a period of 150 days without congressional approval. These tariffs or trade restrictions must address “situations of fundamental international payments problems.” The statute also requires the tariffs be uniform across countries and categories of goods.
A coalition of 24 states sued to block the Trump administration’s use of Section 122 tariffs just days after the Supreme Court struck down the International Emergency Economic Powers Act, or IEEPA, tariffs.
“I have the right to do tariffs, and I’ve always had the right to do tariffs,” President Donald Trump said just hours after the Supreme Court decision.
In the second case before the same court on Friday, two small businesses, a spice importer and a toy manufacturer, will be represented by the Liberty Justice Center, which partnered with other small businesses to successfully block the IEEPA tariffs.
This new legal challenge comes after the Supreme Court invalidated most of Trump’s sweeping “Liberation Day” tariffs. In a 6-3 ruling on Feb. 20, the justices declared the president did not have the authority to impose tariffs under IEEPA.
Immediately after that ruling, the president introduced a new wave of global tariffs using Section 122 of the Trade Act of 1974. Initially he set those tariffs at a blanket rate of 10%. Just one day later, he signaled he would raise them to 15%, but he has not done so yet.
The use of Section 122 by a president to implement tariffs is unprecedented.
“The President’s attempt to use Section 122 to impose his desired tariffs is as lawless as his prior use of IEEPA,” the plaintiff states write in their suit. “Until last month it was IEEPA, now it is Section 122, but the policy is the same — an exercise of completely unrestrained executive power in an attempt to usurp the taxing power that the Constitution vests in Congress, not the President.”
The plaintiffs argue that the statute only allows a president to bring tariffs under Section 122 to address a “balance of payments” issue, like a sudden global currency crisis. That economic situation is different from the trade deficit Trump is trying to target.
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