Senators reject Nixon-era tariff threat from Trump

Court panel heard April 10 challenge by 23 states led by New York arguing Trump failed to show required balance of payments imbalance for Section 122 tariffs.

Objective Facts

After the Supreme Court ruled Section 122 illegal in February 2026, Trump announced a universal 10% tariff to remain in effect for 150 days until July 24, 2026, under Section 122 of the Trade Act of 1974, later threatening to increase it to 15%. Twenty-three states, led by New York, then sued to block these tariffs, arguing that the government failed to show a serious balance of payments imbalance required to invoke Section 122, with the states' case heard by a panel at the Court of International Trade on April 10, 2026. Senators Reverend Raphael Warnock and Tim Kaine introduced the Reclaim Trade Powers Act, legislation that would repeal Section 122 of the Trade Act of 1974, an outdated law President Trump is using to justify his newest round of global tariffs. During April 10 oral arguments, Trump Justice Department lawyer Brett Shumate repeatedly admitted he cannot say what the balance of payment deficit is and could not even give an estimate, meaning the Administration has no proof that it is "large and serious" as required to use Section 122. Previous administrations have examined Section 122's text in detail and concluded that it simply does not apply to common trade deficits, and since 1976, the United States has had a near-continuous annual trade deficit.

Left-Leaning Perspective

Senators Reverend Raphael Warnock (D-GA), ranking member of the Finance Subcommittee on Trade, and Tim Kaine (D-VA) argued in introducing the Reclaim Trade Powers Act that President Trump's tariff policies are wrecking the economy and American families are paying the price, saying the administration promised to protect workers and bring back manufacturing jobs but instead they're seeing higher costs, job losses, and more uncertainty, calling the legislation commonsense to repeal an out-of-date authority raising prices on Americans. Kaine and Warnock have been outspoken against President Trump's new taxes on Americans, with Kaine having led four successful bipartisan pieces of legislation—one in April 2025 and three in October 2025—to passage in the Senate to nullify Trump's global tariff and levies on Canada and Brazil. The senators noted that Section 122 was written in the 1970s when the dollar was still linked to gold and fixed exchange rates as a tool to respond quickly if foreign central banks threatened to drain U.S. reserves, but the U.S. abandoned that system decades ago, making the provision obsolete and ill-suited to modern trade disputes. Democrats cited data that the Tax Foundation found President Trump's tariffs cost the average American household $1,000 last year, with most American families on track to lose $1,300 from President Trump's tariffs in 2026. Trump has promised to raise the broad-based tariffs to 15 percent, marking the first time Section 122 authority has been invoked in its 50-year history. The Trump administration is eyeing Section 122 tariffs, which last only 150 days and require a vote to extend from Congress—which Senate Democrats could filibuster—and although the requirement recognizes the central constitutional role of the legislative branch in taxation, it will require members of the House and Senate to take responsibility for votes they may well be asked to cast just a few months before the 2026 midterm elections.

Right-Leaning Perspective

The Trump administration said that Trump acted within his legal authority under Section 122 of the Trade Act of 1974, which permits the president's 10% tariff on all imports, with Department of Justice lawyers opposing pausing the tariffs and explaining that the challengers' request lacked legal merit, arguing that plaintiffs previously agreed that Section 122 could be used to impose tariffs but now claim it is ineffective, suggesting Congress passed a law with no purpose. The White House contended that President Trump is invoking authority under Section 122 to address fundamental international payment problems, and by taking this action, the United States can stem the outflow of its dollars to foreign producers and incentivize the return of domestic production, creating good paying jobs and lowering costs for consumers. The White House stated that the Supreme Court's disappointing decision will not deter the President's effort to reshape the long-distorted global trading system that has undermined the economic and national security of the country, and that since Day One, President Trump has challenged the assumption that the United States must tolerate the distorted and imbalanced global trading system, with the President's trade policy bringing the world to the negotiating table on American terms. However, some conservatives have rejected the legal justification for Section 122, with Andrew C. McCarthy arguing in the conservative National Review that "These new tariffs are even more clearly illegal than Trump's IEEPA tariffs." The Wall Street Journal opinion page declared that "Mr. Trump's reading of Section 122 is erroneous," likening Trump's Plan B to what they called failed "statute shopping" by President Biden, representing a notable fracture within right-wing commentary. Since Section 122 has never been used in this way, its constitutionality and limits have yet to be tested in court, leaving the legal foundation of Trump's approach uncertain despite administration assertions of authority.

Deep Dive

Section 122 of the Trade Act of 1974 was created during a time of economic uncertainty and was largely meant to protect the U.S. currency after a period of large U.S. trade deficits, enacted after President Nixon declared a goal of improving the U.S. balance of payments. In August 1971, a "large and serious" drain on the United States' official reserves led to Nixon's "Nixon Shock," in which he suspended the dollar's convertibility into gold, with a balance-of-payments deficit existing for most years between 1950 and 1971. However, not until 1976, when balance-of-payments deficits were no longer possible due to the termination of the fixed exchange system, did the United States begin to experience frequent trade deficits. Previous administrations have examined Section 122's text in detail and come to the conclusion that it simply does not apply to common trade deficits, and since 1976, the United States has had a near-continuous annual trade deficit. The core dispute crystallized at April 10 oral arguments when Trump Justice Department lawyer Brett Shumate repeatedly admitted he cannot say what the balance of payment deficit is and could not even give an estimate, meaning the Administration has no proof that it is "large and serious" as required to use Section 122. At least two of the judges suggested that the government's theory of Section 122 "proves too much"—under the administration's interpretation, the president can invoke Section 122 virtually any time he wants because there will always be "fundamental international payments problems" causing "large and serious United States balance-of-payments deficits," which if correct means the administration has to lose. Critically, the judges were skeptical of the government's claim that trade deficits alone are sufficient to trigger Section 122, with one judge stating "[a]re you really saying that a large trade deficit alone is sufficient?… I don't think it is, and I think Congress didn't think it is". Any Section 122 tariffs Trump imposes may last for up to only 150 days and are limited to 15 percent, with Congress needing to approve an extension of Trump's threatened Section 122 tariffs to go more than 150 days—creating a genuine constitutional constraint absent from the invalidated IEEPA authority. The lawsuit outcomes could determine not just the legal validity of current tariffs expiring July 24, 2026, but also whether courts will permit Trump to repeatedly reinvoke Section 122 as a workaround to the 150-day limitation.

OBJ SPEAKING

Create StoryTimelinesVoter ToolsRegional AnalysisAll StoriesCommunity PicksUSWorldPoliticsBusinessHealthEntertainmentTechnologyAbout

Senators reject Nixon-era tariff threat from Trump

Court panel heard April 10 challenge by 23 states led by New York arguing Trump failed to show required balance of payments imbalance for Section 122 tariffs.

Apr 10, 2026· Updated Apr 28, 2026
What's Going On

After the Supreme Court ruled Section 122 illegal in February 2026, Trump announced a universal 10% tariff to remain in effect for 150 days until July 24, 2026, under Section 122 of the Trade Act of 1974, later threatening to increase it to 15%. Twenty-three states, led by New York, then sued to block these tariffs, arguing that the government failed to show a serious balance of payments imbalance required to invoke Section 122, with the states' case heard by a panel at the Court of International Trade on April 10, 2026. Senators Reverend Raphael Warnock and Tim Kaine introduced the Reclaim Trade Powers Act, legislation that would repeal Section 122 of the Trade Act of 1974, an outdated law President Trump is using to justify his newest round of global tariffs. During April 10 oral arguments, Trump Justice Department lawyer Brett Shumate repeatedly admitted he cannot say what the balance of payment deficit is and could not even give an estimate, meaning the Administration has no proof that it is "large and serious" as required to use Section 122. Previous administrations have examined Section 122's text in detail and concluded that it simply does not apply to common trade deficits, and since 1976, the United States has had a near-continuous annual trade deficit.

Left says: Senator Kaine characterized Trump as relying on an outdated authority that has never been used in history to raise prices on Americans. Democrats cited data that the Tax Foundation found Trump's tariffs cost the average American household $1,000 last year, with families on track to lose $1,300 in 2026.
Right says: The administration said that Trump acted within his legal authority under Section 122 of the Trade Act of 1974, which permits the president's 10% tariff on all imports. The White House stated the Supreme Court's decision will not deter the President's effort to reshape the long-distorted global trading system that has undermined the economic and national security of the country.
✓ Common Ground
By a 6-3 majority, the Supreme Court held that IEEPA does not authorize the President to impose tariffs—both sides accept this February 2026 ruling as binding.
Both left and right acknowledge that Section 122 tariffs can only be imposed for up to 150 days, after which Congress must vote to continue them, creating a temporary rather than indefinite authority.
Several commentators across the spectrum recognize that Section 122 is a relic of the 1970s created after President Nixon took the United States off the gold standard when the nation was experiencing a crisis, but today there is no crisis.
Both sides acknowledge that Trump swapped out the emergency tariffs the high court struck down with new global tariffs that rely on untested legal authority under Section 122 of the Trade Act of 1974, with some economists and trade experts arguing the conditions do not exist to justify the never-before-deployed Section 122 tariffs.
Objective Deep Dive

Section 122 of the Trade Act of 1974 was created during a time of economic uncertainty and was largely meant to protect the U.S. currency after a period of large U.S. trade deficits, enacted after President Nixon declared a goal of improving the U.S. balance of payments. In August 1971, a "large and serious" drain on the United States' official reserves led to Nixon's "Nixon Shock," in which he suspended the dollar's convertibility into gold, with a balance-of-payments deficit existing for most years between 1950 and 1971. However, not until 1976, when balance-of-payments deficits were no longer possible due to the termination of the fixed exchange system, did the United States begin to experience frequent trade deficits. Previous administrations have examined Section 122's text in detail and come to the conclusion that it simply does not apply to common trade deficits, and since 1976, the United States has had a near-continuous annual trade deficit.

The core dispute crystallized at April 10 oral arguments when Trump Justice Department lawyer Brett Shumate repeatedly admitted he cannot say what the balance of payment deficit is and could not even give an estimate, meaning the Administration has no proof that it is "large and serious" as required to use Section 122. At least two of the judges suggested that the government's theory of Section 122 "proves too much"—under the administration's interpretation, the president can invoke Section 122 virtually any time he wants because there will always be "fundamental international payments problems" causing "large and serious United States balance-of-payments deficits," which if correct means the administration has to lose. Critically, the judges were skeptical of the government's claim that trade deficits alone are sufficient to trigger Section 122, with one judge stating "[a]re you really saying that a large trade deficit alone is sufficient?… I don't think it is, and I think Congress didn't think it is".

Any Section 122 tariffs Trump imposes may last for up to only 150 days and are limited to 15 percent, with Congress needing to approve an extension of Trump's threatened Section 122 tariffs to go more than 150 days—creating a genuine constitutional constraint absent from the invalidated IEEPA authority. The lawsuit outcomes could determine not just the legal validity of current tariffs expiring July 24, 2026, but also whether courts will permit Trump to repeatedly reinvoke Section 122 as a workaround to the 150-day limitation.

◈ Tone Comparison

Democratic criticism emphasizes "outdated," "obsolete," and "never been used in history" to frame Section 122 as antiquated, while the Trump administration uses formal legal language about "authority" and "national interests." Conservative critics like McCarthy and the Wall Street Journal also employ harsh language ("clearly illegal"), fracturing typical right-left alignment.