A federal trade court on Friday appeared skeptical of President Donald Trump’s use of a little-known emergency trade law to justify his sweeping 10% global tariffs, in a case that could help define the outer bounds of presidential tariff authority. The U.S. Court of International Trade in New York heard oral arguments before a three-judge panel on the legality of the tariffs, which Trump imposed in February after the Supreme Court struck down his earlier, broader tariffs. **Who Gets Hit When Power Moves Upward** The fight is over who gets to impose broad import fees on trading partners without congressional approval, and who pays when that power is exercised from above. Trump cited persistent trade deficits with foreign nations as the basis for reimposing tariffs, turning a sweeping economic decision into a unilateral act. The case centers on when and how a sitting president can do that, with small businesses and Democratic-led states among the challengers pushing back against the tariff regime. Judge Timothy Stanceu captured the gap between the old statute and the current use of it, saying, “We’re not quite sure how to translate 1974 into 2026.” Another judge pressed Justice Department lawyer Brett Shumate directly: “Are you really saying that a large trade deficit alone is sufficient?” The judge added, “I don’t think it is, and I think Congress didn’t think it is.” **The Emergency Law and the Limits of Command** The law at the center of the dispute is Section 122 of the Trade Act of 1974, an emergency provision designed to address large and serious balance-of-payments problems and to allow a president to impose import fees of up to 15% for 150 days. Trump’s lawyers said the statute gave him room to act, but the judges’ questions suggested skepticism about whether a trade deficit alone can be turned into a blank check for executive power. Shumate argued that Congress gave presidents broad discretion to assess economic conditions and identify what balance-of-payments deficits warrant emergency intervention. He said, “The important point is that Congress provided the president [with] discretion.” He also said Trump could have invoked Section 122 earlier and that both Section 122 and the International Emergency Economic Powers Act were available to Trump. Opposing lawyers described that theory as dangerously expansive. Jeffrey Schwab of the Liberty Justice Center said the government’s theory was “very, very, very broad,” and argued it could allow the president to act “at any point, at any moment that he wants, forever.” Schwab also urged the judges to consider the major questions doctrine, saying the case involved “a massive amount of power supposedly given to the president that obviously implicates vast economic and political significance, and in a situation where we have an old statute that’s never been used in this way before by any president.” **Courts, Congress, and the Tariff Machine** The Washington Post said the court heard oral arguments Friday in an attempt to overturn the temporary tariffs Trump turned to after the Supreme Court in February struck down his preferred choice, even bigger and more sweeping tariffs. Politico said the duties can only remain in effect for 150 days and are set to expire in July unless Congress acts to extend them. Politico also said the White House has made clear it intends to use the duties as a bridge until it can impose duties under different legal authorities that allow for permanent tariffs. The dispute follows a lawsuit by a group of 24 attorneys general, who argued that Trump’s use of Section 122 was an illegal attempt to sidestep the Supreme Court’s February ruling blocking his use of an emergency economic powers law to impose his so-called Liberation Day tariffs. The legal battle is not just about one tariff order; it is about the machinery of executive trade power and how far a president can push it without direct congressional approval. Politico said the Supreme Court’s ruling left Trump flailing and attacking the court for spurning him while claiming the ruling gave him an even stronger hand to use other mechanisms to impose alternative tariffs at even higher levels. Trump also promised to increase the tariffs to 15% but has not done so. The court’s skepticism on Friday suggested the new Section 122 tariffs might follow a legal fight similar to the one over his first tariffs. The case is seen as one that could help define the outer bounds of presidential tariff authority and carries enormous ramifications for Trump’s economic agenda. For the people and businesses caught under the tariff regime, the decision-making sits far above them, while the costs and consequences land below. The court’s questions made clear that the fight is over whether a president can turn emergency language into a standing tool of economic command, or whether even this apparatus has limits when challenged in court.
