The U.S. Court of International Trade has dealt the Trump administration a second major legal blow on tariffs, striking down the 10% global import surcharge imposed after the Supreme Court invalidated the president’s first round of levies in February.
The May 7 ruling adds uncertainty to a trade landscape that has moved fast — from that landmark Supreme Court decision, which put more than $166 billion in collected tariff revenue at risk of refunds, to new 100% duties on branded drug imports, to open federal investigations into medical devices and PPE that could yield additional levies later this year.
Health system supply chain, pharmacy and finance leaders have been watching all these threads closely, and the trade court’s May 7 decision gives them one more variable to track.
Here are five things to know from the latest ruling:
- A three-judge panel ruled 2-1 that President Donald Trump’s 10% import surcharge — imposed under Section 122 of the Trade Act of 1974 — exceeded his statutory authority. The majority held that Trump’s proclamation “is invalid, and the tariffs imposed on Plaintiffs are unauthorized by law.”
- The court granted summary judgment to the state of Washington and two private plaintiffs — spice importer Burlap & Barrel and toy company Basic Fun, which had expected to pay $60,000 and $690,000, respectively, in levies — and ordered the government to refund duties already paid, with interest. Claims from more than 20 other states were dismissed for lack of standing.
- The ruling’s immediate impact may be limited. The court declined to issue a universal injunction, meaning importers broadly do not get automatic relief. The Section 122 tariff was also already set to expire July 24. The administration is expected to appeal, according to a May 7 report from The Wall Street Journal.
- The administration plans to replace the expiring tariff with duties under Section 301 of the Trade Act — a more legally durable authority. Two Section 301 investigations were launched in March, targeting nations with excess industrial manufacturing capacity and those that fail to block goods made with forced labor, are expected to conclude around the July 24 expiration date.
- Separate Section 232 investigations into medical devices, PPE and consumables remain open and unaffected by the ruling. Healthcare groups including the American Hospital Association have warned that tariffs from those probes could disrupt access to essential supplies — including gloves, gowns, syringes and anesthesia equipment — and push costs downstream to hospitals, insurers and patients.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.