In a stunning double blow to the White House, the Federal Trade Court has just struck down President Trump’s backup tariff plan—mere days after the Supreme Court dismantled his primary tariff regime in a decisive 6-3 ruling. This legal one-two punch leaves the administration scrambling, with billions of dollars in refunds now hanging in the balance.
The Supreme Court made it crystal clear: President Trump does not have the authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). That landmark decision only wiped out the tariffs enacted under that law, but Trump had already unveiled a 10% global tariff as a fallback—a bold insurance policy designed to keep the pressure on foreign trade partners.
That backup plan didn’t last long. A small business stepped forward and sued in the U.S. Court of International Trade, challenging the legality of those across-the-board tariffs. On Thursday, that court ruled against Trump, delivering a 2-1 verdict that declared the global tariffs unjustified under a 1970s trade law.
The ruling marks a victory for the small business plaintiffs, who argued the tariffs—imposed on February 24—were crippling and illegal. One judge dissented, calling the decision premature, but the majority stood firm, handing the Trump administration yet another legal defeat.
Now the real heat begins. The administration had asked for a 90-day delay to refund the tariffs, but the Federal Circuit Court of Appeals denied that request in March, refusing to slow the Supreme Court’s mandate. Judge Richard Eaton—a Clinton appointee—recently ordered the Trump administration to start refunding a staggering $130 billion in tariffs immediately.
This is not just a legal skirmish—it’s a seismic shift in trade policy. The courts have drawn a line in the sand, and the message is unmistakable: emergency powers cannot be used to rewrite global trade rules on a whim. For small businesses caught in the crossfire, this victory feels like a lifeline. For the White House, it’s a crisis demanding an entirely new playbook.
