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WASHINGTON — The US Court of International Trade pressed Justice Department lawyers during oral arguments on Friday on a legal challenge to President Trump’s 10% global tariffs.

The lawsuit, brought by 24 mostly Democratic-led states like Oregon as well as small businesses, opposes the new levies imposed after the Supreme Court struck down Trump’s so-called “reciprocal” duties.

The plaintiffs alleged that the revised tariffs were implemented under a different law than the one at issue in the high court’s Feb. 20 decision: the International Emergency Economic Powers Act.


  The US Court of International Trade is hearing oral arguments on Friday on a legal challenge to President Trump’s 10% global tariffs. REUTERS The US Court of International Trade is hearing oral arguments on Friday on a legal challenge to President Trump’s 10% global tariffs. REUTERS

Invoking Section 122 of the Trade Act of 1974, Trump on Feb. 24 authorized 10% import tariffs for up to 150 days to address “large and serious United States balance-of-payments deficits” and halt depreciation of the US dollar.

The president has indicated he would hike the import tax to as high as 15%.

The three-judge panel declined to issue an immediate ruling, but a decision favoring the plaintiffs would likely prompt an immediate appeal by the Department of Justice, potentially returning the case to the Supreme Court.

The IEEPA-related decision has prompted an additional legal battle over more than $170 billion in refunds the Trump administration may owe to importers affected by the trade duties.

Much of Friday’s trade court hearing centered on the Trump administration’s and the plaintiffs’ definitions of “balance-of-payments deficit.”

“The IEEPA case was very different,” said Judge Timothy Stanceu, an appointee of former President George W. Bush.


  Invoking Section 122 of the Trade Act of 1974, Trump, on the same day, authorized 10% import tariffs for up to 150 days to address “large and serious United States balance-of-payments deficits” and halt depreciation of the US dollar. Anadolu via Getty Images Invoking Section 122 of the Trade Act of 1974, Trump, on the same day, authorized 10% import tariffs for up to 150 days to address “large and serious United States balance-of-payments deficits” and halt depreciation of the US dollar. Anadolu via Getty Images

“The IEEPA case turned on whether or not IEEPA authorized the president to impose tariffs. This case has nothing like that,” Stanceu told DOJ attorney Brett Shumate, who works in the Civil Division.

“This case has a statute that expressly allows the imposition of tariffs or quotas. So we’re in a whole different universe now. This one turns on balance of payments deficits, a term that was not involved in” the other case.

The other two judges — Chief Judge Mark Barnett and Judge Claire R. Kelly. both appointees of former President Barack Obama — also grilled the Trump administration’s lawyers over their stance on broadly interpreting the statute.

Shumate argued Friday that the language of the statute encompasses existing trade deficits as well, pointing to the disparity between US imports and exports with certain nations.

The law states that when foreign nations modify existing trade agreements, the president may “withdraw, suspend, or modify the application of substantially equivalent trade agreement obligations of benefit to such foreign country or instrumentality.”

The president can also increase US duties or add other import restrictions “to effect adequate compensation from such foreign country or instrumentality.”\


  U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., U.S., April 2, 2025. REUTERS U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., U.S., April 2, 2025. REUTERS

Lawyers for the states, as well as the spice importer Burlap and Barrel, Inc., and the toy company Basic Fun Inc. argued against a broad interpretation of the statute.

Section 122 was codified when the dollar was still backed by gold and sought to address “fundamental international payments problems” caused by nations exchanging US currency, plaintiffs’ lawyers argued.

Brian Marshall, who is representing the state of Oregon, said “balance-of-payments deficits” was an “economic term of art” representing the “capacity to defend the US dollar’s value in a fixed-rate system.”

“They’re all measures of the capacity of the United States from a central banking perspective to have the sufficient reserves to maintain a fixed peg, and that is not something that the United States has been in the business of for more than 50 years,” Marshall said.

The Oregon lawyer called for a permanent injunction barring the Trump administration from taking aggressive actions to increase tariffs as well.

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