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New Delhi: A US trade court has dealt a fresh setback to President Donald Trump‘s tariff strategy, ruling that his temporary 10% global import duties were wrongly imposed under a 1970s trade law. However, the decision only blocks the tariffs for two private companies and the State of washingtonallowing the levies to remain in effect for most importers while appeals continue.

The ruling was delivered by the United States Court of International Trade in a 2-1 decision. Judges said Trump’s use of Section 122 of the Trade Act of 1974 was not appropriate for addressing the trade deficits cited by the administration.

Limited Relief for Importers

The court refused to impose a nationwide injunction, saying the plaintiffs failed to prove why all importers should receive relief. As a result, only toy manufacturer Basic Fun!spice importer Burlap & Barreland the State of Washington are protected from the tariffs for now.

Washington state successfully argued that the University of Washington had paid tariffs under the disputed policy, giving it standing in the case.

Trump Criticizes Judges, Vows Alternative Tariffs

Reacting to the ruling, Trump criticized the judges and suggested his administration would pursue other legal pathways to keep tariffs in place.

The administration is now expected to rely on Section 301 of the same trade law, which allows tariffs against countries accused of unfair trade practices. Several investigations under Section 301 are already underway and could lead to more permanent tariffs later this year.

Legal Battle Over Tariffs Far From Over

The case comes just months after the Supreme Court of the United States struck down another round of Trump-era tariffs introduced under emergency powers legislation. Trade experts believe the latest decision could trigger a wider legal fight over billions of dollars in potential tariff refunds.

Economists have also questioned the administration’s claim that the US faced a balance-of-payments crisis serious enough to justify emergency trade measures.

With Trump scheduled to discuss trade tensions with Chinese President Xi Jinping next week in beijingthe ruling adds further pressure to an already tense economic relationship between the world’s two largest economies.