The punitive tariff of 10 percent that the US President has imposed on all imports since the end of February is illegal. What impact does this judge’s ruling have on Swiss companies?
May 8, 2026, 6:59 amMay 8, 2026, 6:59 am
A federal court specializing in trade issues on Thursday declared the punitive tariffs of 10 percent that the American president imposed at the end of February to be unlawful. The law that Donald Trump resorted to only allows compulsory levies on foreign goods if the USA is confronted with “large and serious balance of payments deficits”. it says in the complex justification. The prerequisites for such an economic emergency as defined in “Section 122” do not currently exist.
A container ship in front of the Miami skyline in Florida.Image: keystone
The voting ratio in the court was 2 to 1. The losing judge, who owes his appointment to Republican President George W. Bush, primarily criticized the actions of his two colleagues in his dissenting opinion. He therefore did not find it appropriate that the judgment had been made in an accelerated procedure.
Ruling concerns transitional tariffs
The White House initially did not want to comment on the decision, Trump’s second huge defeat at the Court of International Trade in New York. It is quite possible that the government will challenge the verdict in the next instance. The president himself simply said: “Nothing surprises me anymore.”
Donald Trump has to accept another setback.Image: keystone
However, Trump’s economic policy advisers are now faced with a problem: the punitive tariff of 10 percent on all imports is actually only a temporary solution. Trump resorted to these tariffs after the Supreme Court struck down the “Liberation Day” tariffs just over two months ago. Even if legal, Section 122 tariffs could remain in effect for a maximum of 150 days. This is what the corresponding law from 1974 says. In the current case, this deadline expires at the end of July.
Trade representative Jamieson Greer is already preparing the next tariff hammer; With the help of “Section 301,” Trump could punish countries that do not take strong enough action against forced labor and that promote unfair trade practices. Greer also has Switzerland in his sights. A participation process is currently underway.
The consequences of the verdict are “not clear,” says the lawyer
Back to the verdict: Although the commercial court declared the 10 percent punitive tariffs illegal on Thursday, they may still remain in force. The court’s ruling only applies to three plaintiffs, as Jeffrey Schwab of the Liberty Justice Center — the plaintiffs’ nonprofit law firm — explained in a media interview. The plaintiffs were a toy manufacturer (Basic Fun) and a spice importer (Burlap and Barrel) as well as the state of Washington. You no longer have to pay additional tariffs on imported goods. They will also probably benefit from a refund of taxes that have already been paid.
In its decision, the CIT held that Section 122 does NOT authorize the President to impose these tariffs under current economic conditions.
Section 122 is a narrow, time-limited tool intended to address specific balance-of-payments crises—NOT a blank check for the executive… pic.twitter.com/MB4xZzqpWi
— Liberty Justice Center (@LJCenter) May 7, 2026
What happens to the remaining importers is “not clear,” Schwab continued. The verdict is silent about them. But the lawyer also said: “Section 122” expressly mentions that all companies must be treated equally. Accordingly, it would be illegal if some importers had to pay the (illegal) punitive duty, but three did not. What is now crucial is how the government reacts to the verdict, said Schwab.
The American customs chaos is far from over. (aargauerzeitung.ch)