On May 7, 2026, the United States Court of International Trade (“CIT”) struck down Section 122 tariffs in a 2-1 decision. While the court declined to issue a universal injunction, the panel ordered that tariffs can no longer be collected from plaintiffs only who imported merchandise subject to the tariff and brought the action. The panel also ordered refunds with interest to plaintiffs only. This means that filing an action in the CIT is likely necessary to receive immediate benefit from this decision.
Specifically, the court ordered the government to refund Section 122 tariffs, with interest, to the private party plaintiffs and the State of Washington, and that a permanent injunction enjoining the government from collecting Section 122 tariffs from those plaintiffs be implemented by May 12, 2026. The court found that the majority of state plaintiffs were not entitled to a remedy because they were not importers of record.
Section 122 permits temporary tariffs of up to 15% to address “fundamental international payments problems,” including “large and serious United States balance-of-payments deficits.” Proclamation 11012 invoked Section 122 to place a 10% tariff on most goods effective February 24, 2026.
Central to the issue of validity of Section 122 tariffs was the definition of “balance-of-payments deficits” in the context of the Trade Act of 1974, the authority used to invoke the tariffs in Proclamation 11012. Analyzing legislative history such as congressional reports, the CIT determined that “balance-of-payments deficits” refers to deficits in liquidity, official settlements, or basic balance, and is distinct from trade and current account deficits. The court therefore determined that the Proclamation impermissibly used trade and current account deficits “to stand in the place of balance-of-payment deficits.” The resulting tariffs were therefore found invalid.
While the administration has not commented on this ruling as of the time of this article, it is anticipated that the government will appeal.
Importers should strongly consider filing cases at the CIT to (1) stop paying Section 122 tariffs and (2) receive refunds with interest of Section 122 tariffs, pending potential appeals.
You may reach out to one of the following trade professionals here to discuss filing a case or otherwise addressing this matter.
Section 122 Tariff Invalidated; Relief Granted Only to Plaintiffs