US trade court has struck down former President Donald Trump’s controversial 10 percent global tariffs, dealing another major setback to his aggressive trade agenda and creating fresh uncertainty for global exporters, including Bangladesh’s apparel industry.
The ruling by the United States Court of International Trade came after several small American businesses challenged the legality of the tariffs, arguing that the Trump administration exceeded presidential authority by imposing blanket import duties under a decades-old trade law.
The court, in a 2-1 decision, ruled that Trump’s February 2026 tariffs were not justified under Section 122 of the Trade Act of 1974, the legal provision the administration used after the U.S. Supreme Court earlier invalidated a broader set of Trump-era tariffs imposed under emergency economic powers.
The ruling marks the second major judicial rejection of Trump’s tariff strategy this year and could significantly affect future U.S. trade policy discussions ahead of the country’s upcoming political and economic negotiations.
Trump had announced the universal 10 percent tariff in February after the Supreme Court blocked his earlier “Liberation Day” tariff measures imposed under the International Emergency Economic Powers Act (IEEPA). The administration argued that the new duties were necessary to address America’s massive trade imbalance and protect domestic manufacturing industries.
Also Read: Trump Imposes New Global 10% Tariff After U.S. Duties Ruled Illegal
The White House claimed the United States was facing a $1.2 trillion goods trade deficit and a current account deficit equivalent to nearly 4 percent of GDP, justifying emergency trade intervention. However, the trade court found that Section 122 was intended only for serious balance-of-payments crises and not for addressing the type of long-term trade deficits cited by the administration.
According to the ruling, Congress designed Section 122 as a temporary safeguard measure to stabilize the dollar or respond to acute international payment crises, not as a broad mechanism for imposing universal tariffs across nearly all imports.
The legal challenge was brought by companies including toy manufacturer Basic Fun! and spice importer Burlap & Barrel, alongside the State of Washington. The businesses argued that the tariffs were creating severe financial pressure by increasing import costs and disrupting supply chains already strained by inflation and global economic uncertainty.
Basic Fun! CEO Jay Foreman described the court decision as a major victory for American companies dependent on global manufacturing networks to deliver affordable products to consumers.
“This decision is an important victory for American companies that rely on global production to supply safe and affordable goods,” Foreman said in a statement following the verdict.
Despite the ruling, the legal battle is far from over. The Trump administration has already appealed the decision, signaling that tariffs will remain a central part of Trump’s economic platform as he continues pushing for tougher trade measures against key global partners including China and the European Union.
Legal experts say the administration may now increasingly rely on other trade mechanisms such as Section 301 investigations or Section 232 national security provisions, both of which have historically survived stronger legal scrutiny.
The court decision currently applies only to the plaintiffs involved in the lawsuit rather than all importers nationwide. However, analysts believe the ruling could trigger a wave of additional legal challenges from businesses seeking refunds on tariffs already paid.
Financial analysts estimate companies could potentially seek billions of dollars in tariff refunds if similar cases succeed in court.
The development is being closely watched across global export markets, particularly in Asia’s textile and apparel manufacturing hubs including Bangladesh, Vietnam and China.
Bangladesh, the world’s second-largest apparel exporter, remains heavily dependent on the U.S. market for garment exports. Industry insiders say prolonged tariff uncertainty could complicate sourcing strategies, pricing negotiations and investment decisions for international brands sourcing from South Asia.
Although Bangladesh was not directly targeted under the temporary 10 percent tariff structure, the broader uncertainty surrounding U.S. trade policy continues to concern exporters already navigating inflationary pressures, geopolitical tensions and slowing global demand.
Trade economists also warn that repeated tariff battles risk increasing costs across global supply chains, with consumers ultimately bearing much of the financial burden through higher prices on imported products.
Meanwhile, global investors and manufacturers are now waiting to see whether the appeal courts will uphold the latest ruling or whether the Trump administration will introduce new trade measures under alternative legal authorities.
For now, the decision represents another reminder that U.S. courts are increasingly scrutinizing the limits of presidential trade powers, particularly when sweeping tariff policies risk reshaping global commerce without explicit congressional approval.
