The court delivered a split 2–1 verdict, concluding that the administration failed to legally justify the tariffs under Section 122 of the Trade Act of 1974. According to the ruling, the government did not establish the existence of a serious balance-of-payments crisis, a mandatory condition required to invoke the provision.
The contested tariffs were imposed earlier this year following a decision by the United States Supreme Court, which had already struck down a broader set of import duties introduced by the Trump administration. The latest judgment marks another major judicial reversal of the administration’s trade measures.
In its order, the court directed the federal government to immediately cease collecting the tariffs from companies involved in the litigation. It further mandated the refund of duties already paid by those affected entities. However, the ruling clarified that the tariffs will continue to remain in force for other importers until July, creating a temporary dual enforcement framework.
Section 122 of the Trade Act of 1974 permits a United States President to impose tariffs of up to 15 percent without Congressional approval, but only under specific economic conditions. The court held that those conditions were not satisfied in the present case, rendering the tariff imposition legally untenable.
Reacting to the judgment, President Donald Trump stated that his administration would examine alternative legal and policy mechanisms to advance its trade objectives, signaling continued intent to pursue an assertive tariff-based strategy despite the ruling.
The decision is widely seen as a critical moment in the ongoing legal and constitutional debate over the limits of executive authority in international trade policy, with potential implications for future tariff actions and federal trade enforcement mechanisms.
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