Trump's Tariff Tactics Face Legal Hurdles. UK Firms Brace for Chaos.

A second legal assault on Donald Trump's tariff regime landed on Thursday, as 24 US states filed suit to challenge the president's latest attempt to impose sweeping import duties after the Supreme Court declared his first effort unconstitutional. The lawsuit pushes America's constitutional crisis over trade powers into uncharted territory, with profound implications for any British firms hoping for clarity on transatlantic commerce. The challenge targets Trump's hastily announced 10% levy, deployed immediately after the court struck down its previous tariff structure built on emergency economic powers legislation.

What makes this legal fight particularly consequential for UK interests is not simply the duty rates themselves. The broader question now before American courts is whether any US president can credibly negotiate trade agreements when their authority to impose or remove tariffs without Congressional approval remains fundamentally contested.

A temporary fix with a built-in expiration date

The White House's choice of Section 122 as its legal foundation carries inherent limitations that expose the precarious nature of current US trade policy. The statute permits tariffs up to 15% for a maximum of 150 days under specific conditions relating to balance-of-payments problems. Treasury Secretary Scott Bessent indicated recently that the administration was "likely" to raise the current 10% rate to the full 15% ceiling this week.

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Even if the courts ultimately side with Trump on Section 122's applicability, British exporters face tariffs with an explicit expiration date. The question of what replaces them after that 150-day window remains unanswered.

Congress holds the power to impose taxes, including import duties, and the president cannot simply appropriate that authority by invoking various statutory provisions.

The lawsuit, led by attorneys general from New York, California, Oregon and Arizona, makes the same core constitutional argument that succeeded against the earlier tariff regime. According to the complaint filed in the US Court of International Trade, Section 122 was never intended to address broad trade imbalances of the sort the White House now claims justify the levies. Arizona Attorney General Kris Mayes declared: "He's calling it a fix. It is not. It is the same illegal power-grab under a different statute than he used the last time."

The refund precedent and what comes next

A federal judge moved on Wednesday to authorise refunds for businesses that paid duties under the now-invalidated tariff structure, ordering Customs and Border Protection to begin issuing payments. That ruling establishes a template: if the courts strike down the Section 122 tariffs, thousands of firms could again claim reimbursement for what would retroactively become illegal tax collection.

California Attorney General Rob Bonta suggested at Thursday's announcement that the new lawsuit could deliver relief to businesses and consumers "very soon", though such timelines remain speculative given the complexity of trade litigation. White House spokesman Kush Desai said the administration would "vigorously" defend the tariffs, arguing that the president was "using his authority granted by Congress to address fundamental international payments problems and to deal with our country's large and serious balance-of-payments deficits".

The constitutional mechanics matter less to British businesses than the practical outcome, but the legal uncertainty creates an impossible planning environment. UK manufacturers shipping to American customers cannot price products accurately when the applicable duty rate might be 10%, 15%, zero, or subject to retroactive refunds. Financial hedging becomes nearly worthless when the underlying policy framework faces existential legal challenges every few weeks.

The UK's awkward position

For the British government, this evolving crisis poses strategic complications beyond immediate tariff exposure. Any serious UK-US trade negotiations require an American counterparty with clear authority to implement agreed terms. If US courts ultimately determine that presidents lack the power to impose or eliminate tariffs without specific Congressional authorisation, the entire architecture of bilateral trade discussions shifts.

Parliament would effectively need to negotiate with Congress, not with the White House. That represents a fundamentally different diplomatic and legislative exercise.

The arrangement would require cultivation of relationships across multiple congressional committees and both political parties rather than the traditional executive-to-executive model. The irony is sharp: Trump campaigned on tariffs as a signature policy tool, yet his administration has now seen the Supreme Court invalidate one tariff structure entirely and faces a second major legal challenge within weeks.

The president's preference for unilateral executive action on trade collides with constitutional limits that, if enforced consistently, would require him to seek Congressional approval for the very policies he considers central to his economic agenda. British businesses with significant US exposure face months of continued uncertainty regardless of how courts rule. If Trump loses again, he will likely attempt a third legal approach or seek emergency Congressional action.

The immediate financial impact on UK exporters depends heavily on sector and product category, but the institutional damage from this constitutional standoff will persist well beyond any individual tariff rate. American trade policy credibility, already strained, cannot survive repeated judicial rebukes without foreign partners adjusting their expectations about what Washington can actually deliver at the negotiating table.

More articles by Ross Williams