A federal court struck down Trump’s 10% global tariffs and ruled a grant-cut program unconstitutional, with appeals expected.
A federal court has dealt fresh legal setbacks to President Donald Trump’s economic agenda, striking down his 10% global tariffs while another court blocked broad federal grant cancellations tied to the administration’s stated priorities.
In a decision issued by a panel of judges at the Court of International Trade in New York. the court found Trump’s 10% tariffs were unlawful after small businesses challenged the policy.. The ruling directly targets a tariff package the administration had framed as a narrow. time-limited measure under Section 122 of the Trade Act of 1974.
The court’s action follows the earlier Supreme Court defeat of Trump’s larger “Liberation Day” tariffs in February.. In this case. the trade court said the president exceeded his authority under the statute that was cited to justify the new tariff cuts. describing the tariffs as invalid and not authorized by law.
Insight: When courts narrow the powers presidents can use to impose or maintain trade barriers, the impact often extends beyond the immediate parties. It can also reshape how future tariff threats are drafted and defended in litigation.
The scope of the ruling is limited: it applies to the state of Washington and to the two businesses that brought the lawsuit. Even so, the decision also requires the White House to process refunds, plus interest, for tariffs paid by those entities and the state.
The administration is expected to appeal, and the litigation could eventually return to the Supreme Court.. The fact that the tariffs were set to expire later this month unless Congress acted to extend them also adds urgency. because the outcome will determine whether the tariff system can remain in place long enough to outlast the current deadline.
Meanwhile, a separate federal court decision on the administration’s domestic spending cuts raised new constitutional concerns. On Thursday, a judge ruled that cancellations of more than $100 million in humanities grants tied to the National Endowment for the Humanities were unconstitutional.
The ruling described the grant review approach used by Elon Musk’s Department of Government Efficiency as improperly relying on protected characteristics such as race and gender to determine which grants would be terminated.. The judge permanently blocked the administration from proceeding with those cancellations.
Insight: These two court fights show the friction that can arise when an administration moves quickly on high-visibility policies. Even when goals are framed as budgetary or economic, judges may scrutinize the legal process and the authority used to carry them out.
Department of Justice attorneys had argued the cuts were lawful and aligned with a directive to eliminate grants associated with diversity. equity and inclusion efforts. along with a broader aim to reduce what the administration characterized as unnecessary spending.. The judge’s decision rejected that approach and found constitutional violations involving the First Amendment and equal protection principles under the Fifth Amendment.
It is not yet clear whether the administration will appeal the grants ruling. The nonprofits involved in the humanities litigation publicly welcomed the decision, arguing that the court upheld the role of Congress in authorizing grantmaking and protected the integrity of the federal review process.
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