News May 08, 2026
Federal Court Rules Against Trump’s 10% Global Tariff, Though Most Importers Will Still Face Levies Through July
The ruling applies only to the plaintiffs in the case, but sets a legal precedent for other challenges to the global tariff rate Trump imposed in February after the Supreme Court struck down reciprocal tariffs.
Key Takeaways
• The Court of International Trade ruled Trump’s 10% global tariff under the 1974 Trade Act was unjustified.
• The ruling only halts tariff collection and orders refunds for the specific plaintiffs, while other importers will still face the levies through July.
• The decision adds to tariff instability affecting promo, with the administration signaling it may pursue alternative legal avenues to continue imposing tariffs.
President Trump’s tariffs have once again been struck down by the courts.
The Court of International Trade (CIT) has ruled that Trump’s latest 10% global levy is unjustified. The ruling comes just months after the Supreme Court ruled President Trump’s reciprocal tariffs unconstitutional under the International Emergency Economic Powers Act (IEEPA) in February.
After the initial Supreme Court ruling, Trump issued a 10% tariff under the 1974 Trade Act, which justifies the enactment of temporary tariffs for up to 150 days to address large “balance-of-payments deficits.” However, according to the 2-1 CIT ruling, these tariffs failed to identify any “large and serious United States ‘balance-of-payments deficits’ as Congress understood that phrase.”
The 10% tariffs were challenged in court by the Florida toy company Basic Fun!, New York-based spice importer Burlap & Barrel and the State of Washington.
“This decision is an important win for American companies that rely on global manufacturing to deliver safe and affordable products,” Basic Fun! CEO Jay Foreman said in a statement. “Unlawful tariffs make it harder for businesses like ours to compete and grow.”
However, suppliers based outside the State of Washington shouldn’t expect to see these levies disappear just yet. The CIT ruling demands that the Trump administration cease collection on tariffs for the plaintiffs that brought the case, and refund them immediately. All other importers should expect these tariffs to remain in place through July, when the 150-day limit on temporary tariffs under the Trade Act expires.
The ruling, though, sets a legal precedent that could encourage more states and businesses to challenge the tariffs in court. The CIT, a federal court with jurisdiction over customs and international trade laws, could likely also be involved in subsequent cases; a case heard by the CIT regarding reciprocal tariffs was one of the two that consolidated in front of the Supreme Court in February.
In the meantime, this latest decision once again only adds to a growing sense of tariff-related uncertainty for the promo industry, which relies on overseas sourcing for most of its products. Trump is scheduled to meet with Chinese leader Xi Jinping next week, and tariffs are high on the list of agenda items. However, the recent court decision could undermine the administration’s leverage going into these trade negotiations.
As he’s done in the past, the president plans to get creative about using additional justifications to tax businesses importing goods from abroad.
“So, we always do it a different way,” Trump said after the CIT decision. “We get one ruling, and we do it a different way.”
According to some reports, the federal government could owe American businesses up to $175 billion in refunds – a figure likely to increase with the latest ruling. Last month, U.S. Customs and Border Protection launched a portal to allow businesses to submit claims for refunds on IEEPA tariffs paid over the last year.