April 10 (UPI) — President Donald Trump‘s tariffs are back in court Friday to decide on their legality.
The U.S. Court of International Trade will consider the president’s 10% global tariff that he created on Feb. 20 after the U.S. Supreme Court struck down his previous tariffs over his use of emergency powers. The new tariffs are based on Section 122 of the Trade Act of 1974.
That law allows the president to unilaterally surcharge imports up to 15% for up to 150 days “to deal with large and serious United States balance-of-payments deficits.”
Challenging the new levies are Democratic-led states and small businesses.
“This is another case where the president invokes a statute to impose whatever tariffs he wants, its limits be damned,” the states wrote in court filings.
Timothy C. Brightbill, a trade lawyer for the Washington law firm Wiley Rein, told The New York Times that he expects the court to be “skeptical of President Trump’s ability to impose broad tariffs,” including the global 10% rate.
Brightbill said it could be months before the legal system can give a full verdict.
“By then, there will most likely be a new tariff regime in place,” Brightbill said.
The White House said in a statement that Trump was “lawfully using the executive powers granted to him” and the administration was “committed to robustly defending the legality of the president’s actions in court.”
“For over a century, Congress has supplemented the president’s constitutional power over foreign affairs and national security by delegating to him the authority to manage foreign trade in response to international conditions, including by imposing tariffs,” the administration said.
But critics say Trump’s position only includes the U.S trade deficit. They argue that the president is ignoring inflows of foreign capital and financial investment. Those help “balance” the deficit.
They argue that a balance-of-payments crisis is impossible because the United States stopped using the gold standard and a fixed exchange rate system in the 1970s.
“A balance-of-payments crisis is a currency crisis that was of great concern when Congress enacted Section 122, but which can no longer exist,” the states wrote in court filings.
There are 24 states in the suit, along with two small businesses: spice and e-commerce business Burlap & Barrel and Basic Fun!, a toy company that designs and markets Tonka, Lincoln Logs, K’nex and others. They filed separate suits against the tariffs, but the cases will be heard together.
“When these tariffs were first announced last April, we made two promises: we would not raise our prices, and we would not ask our partner farmers to absorb the costs,” Burlap & Barrel wrote on its website. “A year later, we’re proud to say we’ve kept those promises. This lawsuit is about protecting our ability to continue doing that.”
The plaintiffs are represented by the Liberty Justice Center, a libertarian firm that worked on the tariff case that the administration lost at the Supreme Court. The three-judge panel is made up of different judges from the previous panel at the Court of International Trade.
