A federal court on Thursday concluded that President Donald Trump’s global 10% tariffs are unlawful, a decision that the Department of Justice quickly appealed.
In a 2-1 decision, a panel of judges on the Court of International Trade concluded that the Trump administration misread the law used to justify the sweeping tariffs.
The ruling marks the second time the president’s tariff regime has been found to be illegal, with the Supreme Court earlier this year affirming a decision from the Court of International Trade blocking Trump’s first round of tariffs.
Lawyers for the Department of Justice filed a notice of appeal at the Court of International Trade on Friday, signaling plans to challenge yesterday’s ruling.
The United States Court of Appeals for the Federal Circuit in Washington, D.C., handles appeals from the Court of International Trade. The tariffs in question are set to expire in late July and it is unclear if the court will hear the case in time to meaningfully rule on the issue.
The immediate impact of Thursday’s ruling is also unclear. The court granted an injunction for two small businesses and the state of Washington; however, the judges dismissed the claims brought by the larger group of states because they lacked standing.
The dispute boiled down to the definition of the phrase “balance-of-payments deficits.” The Court of International Trade rejected the Trump administration’s argument that the term “balance-of-payments deficits” in Section 122 of the Trade Act of 1974 is the same as a “trade deficit.”
“It is clear that Congress was aware of the differences in the words it chose,” the majority wrote.
President Donald Trump attends an event for military mothers in the East Room of the White House, May 6, 2026, in Washington.
Julia Demaree Nikhinson/AP
The judges acknowledged that the term “causes some confusion,” but concluded that the Trump administration’s interpretation was incorrect.
“The Government argues that in today’s world, the current account is the proper component for identifying a balance-of-payments deficit,” the majority wrote. “Problematically for the Government, and as discussed herein, Congress in 1974 identified the settlement, liquidity, and basic balance deficits as ‘balance-of-payments deficits.'”
The global 10% tariff took effect in February and by statute is set to expire in late July.
