US trade court rules against Trump's 10% global tariffs

NEW YORK, May 7 (Reuters) - The U.S. trade court on Thursday ruled against President Donald Trump's latest 10% global tariffs, finding across-the-board tariffs were not justified under a 1970s trade law. 

The U.S. Court of International Trade ruled in favor of small businesses that challenged the tariffs, which took effect on February 24. The ruling was 2-1, with one judge saying it was premature to grant victory to the small business plaintiffs.

The small businesses had argued the new tariffs were an attempt to sidestep a landmark U.S. Supreme Court decision that struck down the Republican president's 2025 tariffs ​imposed under the International Emergency Economic Powers Act.

In his February order, ​Trump invoked Section 122 of the Trade Act of 1974, which allows for duties for up to 150 days to correct serious "balance of payments ​deficits" or head off an imminent depreciation of the dollar.

Thursday's court ruling found the law was not an appropriate step for the kinds of trade deficits that Trump cited in his February order.

The Trump administration had argued that a serious balance-of-payments deficit existed in the form of a $1.2 trillion annual U.S. goods trade deficit and a current account deficit of 4% of GDP. But some economists and trade lawyers argue the U.S. is not on the cusp of a balance-of-payments crisis, making the new duties vulnerable to a legal challenge.

(Reporting by Dietrich Knauth; Editing by Chris Reese and Sonali Paul)