A three-judge panel at the U.S. Court of International Trade in New York heard oral arguments Friday on lawsuits seeking to block President Donald Trump's 10% tariffs on global imports.

The hearing addressed challenges brought by 24 mostly Democratic-led states, including Oregon, and two small businesses, a spice importer and a toy manufacturer. The plaintiffs argue the tariffs, imposed under Section 122 of the Trade Act of 1974, exceed presidential authority because no "fundamental international payments problem" exists, as required by the statute designed for balance-of-payments crises in the gold standard era.

Brian Marshall, representing Oregon, told the judges the administration's use of routine trade deficits to justify the levies circumvents a February Supreme Court ruling and risks perpetual tariffs through successive renewals. "[If] we have a successive series where there's always tariffs in place, that's a problem," Marshall said.

The tariffs took effect February 24, following the Supreme Court's 6-3 decision in Learning Resources, Inc. v. Trump, which invalidated broader "Liberation Day" duties imposed under the International Emergency Economic Powers Act (IEEPA). The high court held IEEPA does not authorize tariffs, marking a rare limits on executive trade power. No president had previously used IEEPA or Section 122 for such broad levies.

Section 122 allows temporary uniform tariffs up to 15% for up to 150 days to address payments imbalances. Trump's order set the rate at 10%, with plans to increase it to 15%, though that step remains pending. The duties are slated to expire around July 24 unless extended or renewed.

The Trump administration defended the policy as a lawful response to America's persistent trade deficits, framed as a balance-of-payments crisis. White House spokesperson Kush Desai stated, “President Trump is lawfully using the executive powers granted to him by Congress to address our country’s balance of payments crisis."

The Liberty Justice Center, representing the businesses that helped secure the Supreme Court victory, joined the fray, calling the move another unlawful executive overreach on Congress's taxing authority. States sought an expedited review earlier, aiming to halt collections before any potential perpetual cycle.

No ruling emerged from Friday's arguments, which tested whether Trump can sustain his America First trade agenda amid judicial scrutiny. The case underscores ongoing tensions over presidential tariff powers, with billions in duties at stake for importers and consumers.