Trump's '10% Substitute Tariff' Heads to Court Again… Tariff Litigation Spreads at the Court of International Trade

As large-scale tariff litigation has recently been filed over the United States' new tariff policy, uncertainty in the global trade environment is expanding once again.

In March 2026, 24 states, including state governments affiliated with the U.S. Democratic Party and civic groups, filed suit with the federal Court of International Trade, seeking to invalidate the 10% import tariff policy introduced by President Donald Trump.

This lawsuit is drawing attention because it is expanding beyond a trade policy debate into a constitutional dispute over the scope of the President's authority to impose tariffs and its legal basis.

For companies that participate in global supply chains in particular, the situation is assessed as one in which tariff litigation risk is expanding alongside the change in tariff policy.

The most important legal issue in this tariff litigation is the interpretation of the concept of 'balance of payments.'

The state governments that filed the suit argue as follows.

• A trade deficit is a different concept from a balance of payments deficit

Accordingly, they argue that the President's imposition of tariffs on the basis of a trade deficit reflects a misinterpretation of the statute.

Some legal experts, on the other hand, take the view that because the statute does not clearly define the concept of balance of payments, a certain degree of discretion may be recognized for the President's policy judgment.

Ultimately, how much the court will defer to the President's tariff policy judgment, and whether a trade deficit can be regarded as a balance of payments problem, are expected to be the key standards for the determination in this tariff litigation.

This tariff policy includes an 88-page list of exempt items, giving rise to yet another legal dispute.

The executive order includes the following exemption provisions.

• Certain imports from Mexico and Canada
• Automobiles
• Food
• Pharmaceuticals, among others

The party that filed the suit, however, argues that these exemption provisions are contrary to the purpose of the statute, on the ground that the statute provides for tariffs to be applied broadly and uniformly.

As a result, this case may expand into tariff litigation in which not only whether tariffs are imposed but also the manner in which the tariff policy is designed and the lawfulness of the exemption clauses are determined together.

In the recent international trade environment, legal disputes related to tariffs are increasing rapidly along with policy changes.

A response through tariff litigation or administrative appeal may be necessary in the following situations in particular.

• Issues in interpreting the statutes that serve as the basis for tariff imposition
• Disputes over whether tariff exemptions apply
• Responses to import regulations and trade measures
• Disputes relating to anti-dumping and countervailing duties
• Responses to international trade regulations

At Daeryun Law Firm LLP, attorneys handling customs matters and international trade matters work together with customs experts holding licensed customs broker qualifications to provide services such as appeal procedures against tariff imposition dispositions, responses to tariff litigation, and advisory services on international trade regulations.

Where a change in tariff policy gives rise to import or export costs or trade risks for a company, it is important to review a legal response strategy at an early stage.