The US Court of International Trade recently invalidated a 10% global tariff imposed by Donald Trump under Section 122 of the Trade Act of 1974.

Judges ruled that the president lacked the authority to redefine "balance-of-payments deficits" to justify these duties. This decision removes a major piece of leverage just before scheduled trade negotiations with China's President Xi Jinping.

Unlike previous rulings, this decision does not mandate universal refunds, applying only to those who sued. However, it blocks the administration from using this specific law for future collections.

Trump expressed dissatisfaction with the judicial outcome and intends to seek alternative legal paths. It is expected that the administration will accelerate other trade investigations to restore its tariff agenda before July.