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A federal trade court in the United States on Thursday delivered another setback to President Donald Trump’s tariff strategy, ruling that the administration’s temporary 10% global tariffs were not legally justified under federal law.

In a 2-1 ruling, a three-judge panel of the US Court of International Trade in New York said Trump had exceeded the powers granted to the president by Congress. The judges declared the tariffs “invalid” and “unauthorised by law”, marking the latest judicial blow to the administration’s trade agenda.

The ruling came months after the US Supreme Court struck down a broader set of tariffs introduced by the Trump administration last year on imports from nearly every country, intensifying legal scrutiny over the White House’s use of emergency powers to impose trade duties.

India Was Among Countries Hit By Earlier Tariffs

India was also affected by the earlier US tariff regime, facing a 25% duty along with an additional 25% penalty tariff linked to its continued imports of Russian crude oil.

However, an interim trade arrangement between India and the United States later reduced the effective tariff rate to 18% before the Supreme Court eventually struck down the broader measures.

The latest court decision focused on temporary 10% worldwide tariffs imposed under Section 122 of the Trade Act of 1974 after the Supreme Court’s February ruling against the earlier tariff framework. Those tariffs were scheduled to remain in effect until July 24.

Court Limits Relief to Plaintiffs in the Case

Despite ruling against the administration, the court stopped short of blocking the tariffs nationwide. Instead, the judgment applied only to the three plaintiffs involved in the lawsuit, the state of Washington, spice company Burlap & Barrel and toy manufacturer Basic Fun!

Jeffrey Schwab, director of litigation at the Liberty Justice Center, which represented the two businesses, said uncertainty remains over whether companies not directly involved in the case would still be required to pay the tariffs.

“It’s not clear” whether other businesses would continue paying the duties, Schwab said, according to the Associated Press.

Trump Administration Expected to Appeal Ruling

Thursday’s decision marked another legal hurdle for the Trump administration’s attempts to expand presidential tariff powers in the name of protecting the US economy through import duties.

Last year, Trump invoked the International Emergency Economic Powers Act (IEEPA) of 1977, arguing that America’s long-running trade deficit constituted a national emergency. That declaration became the legal basis for sweeping tariffs on imports.

But on February 28, the Supreme Court ruled that the IEEPA did not authorise the president to impose such broad tariffs. Under the US Constitution, Congress holds the authority to levy taxes and tariffs, although it can delegate limited powers to the president.

The Trump administration is expected to challenge Thursday’s ruling.