A US trade court ruled that President Donald Trump’s 10% global tariffs were unlawful, saying they were not justified under the 1974 Trade Act used to impose them.

The 2–1 decision sided with small businesses that challenged the tariffs, arguing the administration was bypassing a previous Supreme Court of the United States ruling limiting emergency trade powers.

The court found the law Trump cited did not apply to the type of trade deficits he used to justify the tariffs.

Meanwhile, Trump separately warned the European Union it must meet trade deal commitments by July 4 or face higher tariffs on goods like cars, The Guardian has reported.

The ruling and tariff threats add further legal and economic uncertainty to Trump’s broader trade policy agenda.