Court Rules Trump's 10% Tariff Unlawful, Another Setback for the Former President

In a significant legal blow to former President Donald Trump, a U.S. trade court has ruled that the 10% tariff he imposed is unlawful. This decision follows a previous Supreme Court ruling that deemed Trump's tariffs unconstitutional. The court's ruling currently affects only two companies and the state of Washington, raising questions about future actions from the Trump administration. As small businesses celebrate this victory, the implications of the ruling could reshape trade policies moving forward. Explore the details of this landmark decision and its potential impact on the business landscape.

By Narendra Chaudhary May 8, 2026, 17:57 IST

Court Decision on Trump's Tariff

Former President Donald Trump has faced another setback regarding tariffs, as a U.S. trade court has declared the 10% tariff he imposed as illegal. This ruling follows a previous decision by the Supreme Court that deemed Trump's tariffs unconstitutional. However, the court's ruling currently applies only to two private importers and the state of Washington.

Details of the Court's Ruling

According to reports, a panel of three judges from the Court of International Trade in New York ruled on the 21st that the 10% tariff was unlawful following a lawsuit brought by small businesses. The court stated that Trump violated the authority granted to the President by Congress under the law. The tariff was labeled as 'invalid' and 'unauthorized.' The court's decision specifically halts the collection of tariffs from the state of Washington and two companies: spice company Burlap & Barrel and toy company Basic Fun.

Background of the Tariff Dispute

This controversy stems from a temporary 10% global tariff imposed by the Trump administration in February, which followed the Supreme Court's reversal of large double-digit tariffs on nearly every country last year. The new tariffs, enacted under Section 122 of the Trade Act of 1974, are set to expire on July 24. The court hearing addressed these tariffs, but it rejected proposals to apply tariffs to the remaining 24 importers, granting relief only to three.

Future Implications

Jeffrey Schwab, a senior attorney with the Liberty Justice Center representing the small businesses, indicated that future actions will depend on the steps taken by the Trump administration and whether the U.S. Justice Department appeals this decision. Meanwhile, the CEO of Basic Fun Inc., Jeff Foreman, welcomed the court's ruling, emphasizing the courage it takes for small businesses to engage in legal battles. Foreman noted that his company has already paid over $100,000 under the disputed tariff.

Supreme Court's Previous Ruling

Earlier, the U.S. Supreme Court ruled that the tariffs imposed by President Trump were unlawful, which led to the introduction of the 10% tariff plan. This historic decision was made with a 6-3 vote. The court stated that Trump was the first president to impose tariffs on over 100 countries by citing an emergency law from the 1970s. Notably, the term 'tariff' was not mentioned in that law, leading the court to declare it unconstitutional.