4 minute read | May.13.2026
On May 6, the U.S. Court of International Trade (CIT) ruled against a 10% tariff on most imports of merchandise into the United States. The U.S. government has appealed the ruling.
For importers and other companies that rely on imports, the CIT ruling raises two key questions:
1. To what extent will the U.S. government cease collection of the 10% “Section 122” tariff?
2. Will importers receive refunds of Section 122 tariff payments?
The ruling comes shortly after the Supreme Court ruled that tariffs purportedly authorized by the International Emergency Economic Powers Act (IEEPA) were unlawful, continuing a trend of searching judicial scrutiny of expansive exercise of executive power to impose broadly applied import tariffs.
On February 20, 2026, the President issued Proclamation 11012, which imposes the 10% tariff on most U.S. imports. The President purported to act under Section 122 of the Trade Act of 1974. This law authorizes tariffs of up to 15% for up to 150 days to address “large and serious balance-of-payments deficits.”
A three-judge panel of the CIT ruled, over a dissent by Judge Stanceu, that this Section 122 tariff is invalid on the grounds that Proclamation 11012 does not invoke authorization that the statute provides. While the statute conditions tariff authority on a finding of a “balance of payments deficit,” the proclamation references balance of trade deficits, current-account deficits, and related economic indicators. The court found that these do not qualify as “balance of payments deficits” within the meaning of the statute. The court granted plaintiffs’ motion for summary judgment and enjoined collection of the tariff on imports of Burlap & Barrel, Basic Fun!, and the State of Washington.
The government has challenged the CIT ruling before the Court of Appeals for the Federal Circuit, which has issued an “administrative” stay of the CIT’s injunction while it considers whether to grant a full stay of the CIT ruling for the duration of the appeal. How quick the appeal will move is still uncertain. The court of appeals may expedite the appeal similar to how it expedited the appeal that led to the Supreme Court’s February 2026 ruling against tariffs under IEEPA.
The CIT expressly declined universally to enjoin collection of the Section 122 tariff. Thus, even if the stay is lifted and the injunction goes back into effect, this would result only in cessation of tariff collection for the importer plaintiffs. In any event, it appears that the government must stop collecting the Section 122 tariff on any imports by July 24 since there is unquestionably no authority for the tariff beyond then.
If the courts ultimately sustain the CIT ruling, it would seem that the government should generally be required to refund Section 122 tariff payments. Apart from the limited, now-stayed injunction, the CIT categorically held that the tariff is without legal foundation. If this ruling becomes definitive, there would not appear to be a basis for the government to reject procedurally valid requests for refunds.
It seems likely that the administration will take other steps to try to maintain near-global higher tariffs. The Trump administration seems to view the Section 122 tariff as, at least in part, a replacement for the invalidated IEEPA tariffs. Earlier this year, the administration commenced two unusually broad investigations under the “Section 301” law, which will likely lead to more tariffs.
It is unclear whether the administration will try to act again under Section 122 if the existing Section 122 tariff is definitively invalidated. Notably, a dissenting CIT judge indicated his view that the White House might readily be able to insulate the Section 122 tariff from judicial attack by adjusting the wording of the underlying presidential proclamation.