CIT Invalidates Section 122 Tariffs — What Importers Should Know Now
On May 7, 2026, the U.S. Court of International Trade (“CIT”) issued a major ruling striking down the Administration’s 10% global import surcharge imposed under Section 122 of the Trade Act of 1974. The decision represents another significant legal setback for the Administration’s tariff strategy and raises immediate questions for importers regarding enforcement, refunds, and preservation of rights.
In a 2-1 ruling, the CIT held that the Administration exceeded its statutory authority when it imposed the temporary surcharge under Proclamation No. 11012. Section 122 authorizes the President to impose temporary import surcharges of up to 15% only in limited circumstances involving “fundamental international payments problems,” including “large and serious United States balance-of-payments deficits.” The court concluded that the government’s justification did not fit within the statutory framework Congress intended when it enacted Section 122. As a result, the CIT granted summary judgment to the importer plaintiffs and entered a permanent injunction preventing collection of the tariffs from those parties.
The ruling is particularly significant because it signals increasing judicial scrutiny of expansive executive tariff authority. Earlier this year, the Administration also suffered a setback when the Supreme Court invalidated portions of its 2025 tariff actions. Together, these decisions highlight the legal vulnerabilities associated with relying on broad or unconventional statutory authorities to impose sweeping trade measures.
For importers, however, the practical implications remain far from settled. On May 8, 2026, the Department of Justice filed a notice of appeal with the U.S. Court of Appeals for the Federal Circuit, ensuring that uncertainty will continue while the litigation proceeds. Importers should not assume that Section 122 tariff collections will immediately cease, that refunds will automatically be issued, or that the ruling broadly applies beyond the plaintiffs involved in the case. At this stage, the court’s injunction and refund relief are limited to the parties that successfully challenged the tariffs, and additional litigation will likely determine whether broader relief becomes available.
The ongoing appeal also creates important procedural concerns for importers seeking to preserve potential recovery rights. Liquidation and protest deadlines may continue to run during the appellate process, meaning businesses cannot afford to take a “wait and see” approach. Depending on the status of particular entries, importers may need to evaluate whether Post Summary Corrections (“PSCs”), protests, or other procedural actions are necessary to preserve potential refund opportunities. Failure to act within applicable deadlines could jeopardize the ability to recover duties later if the tariffs are ultimately invalidated on a broader basis.
The uncertainty surrounding the ruling also comes against a backdrop of continuing volatility in U.S. trade policy. Although the CIT’s decision limits the Administration’s use of Section 122 in this context, the government retains numerous other trade enforcement mechanisms that could support future tariff actions, including industry-specific tariffs and country-specific trade remedies. As a result, businesses should continue monitoring developments closely while evaluating the potential impact on their customs compliance programs, supply chains, and long-term sourcing strategies.
Importers affected by the Section 122 tariffs should consult customs counsel promptly to assess how the ruling and ongoing appeal may affect their entries and potential recovery options. A proactive review of liquidation status, entry history, and procedural deadlines may prove critical as the legal landscape continues to evolve.
Our firm is actively assisting importers in navigating these rapidly changing developments. We work with clients to evaluate refund opportunities, preserve protest rights, assess exposure under evolving tariff programs, and develop practical strategies to minimize disruption and protect recovery claims. As the appeal proceeds and additional guidance emerges, businesses should remain vigilant and prepared to act quickly to preserve their interests.
Disclaimer:
This blog post is provided for general informational purposes only and does not constitute legal advice. The legal issues discussed involve evolving case law and fact-specific considerations that may differ materially depending on an importer’s circumstances, entry history, and procedural posture. Reading this post does not create an attorney–client relationship. Importers should consult qualified counsel to obtain advice tailored to their specific situation before taking or refraining from any action.