Newspunjab
8 May,2026
US President Donald Trump’s trade policies have suffered a major setback. The Federal Trade Commission has struck down the 10 percent global tariff imposed by the Trump administration as illegal. The court said the government had overstepped its authority by misinterpreting the powers granted under the 1974 Trade Act.
In the court’s 2-1 majority decision, Judges Mark A. Barnett and Claire R. Kelly made it clear that the administration cannot invoke Section 122 on the basis of trade deficits. According to the court, the law was created to address the specific economic conditions and balance of payments crisis of the 1970s, not modern trade deficits.
Trump imposed these tariffs in February this year. The government had argued for a temporary surcharge of up to 15 percent for 150 days, citing Section 122, but the court ruled it incomplete on legal grounds.
The court warned in its ruling that if such broad interpretations were allowed, the president would have unlimited power to impose tariffs, which would be contrary to the democratic process. The judges said that Congress had granted these powers in 1974 only for limited and specific circumstances.
After this decision, questions have now been raised about Trump’s ‘America First’ trade policy and it is being seen as a major failure for his economic strategy.
