The U.S. Court of International Trade (CIT) issued a divided opinion on May 7, 2026, holding that the 10% “temporary global tariff” imposed under Section 122 of the Trade Act of 1974 was unlawful.
On February 20, 2026, President Trump issued Proclamation No. 11012, imposing an additional 10% ad valorem duty on most imports into the United States, effective February 24, 2026. The proclamation relied on Section 122 of the Trade Act of 1974, which authorizes temporary import surcharges of up to 15% ad valorem under specified international payments conditions, including “large and serious United States balance of payments deficits.” No president had previously invoked Section 122 since its enactment in 1974.
The tariffs were intended to remain in effect for up to 150 days—through July 24, 2026—absent congressional reauthorization. As with other trade remedy measures, importers were required to report a new Chapter 99 tariff provision under the Harmonized Tariff Schedule of the United States (HTSUS): 9903.03.01, subject to limited exceptions. U.S. Customs and Border Protection (CBP) issued implementing guidance on February 23, 2026, and several states and private importers filed legal challenges shortly thereafter.
Now the CIT ruled that the statutory conditions required to invoke Section 122 had not been satisfied and that the presidential proclamation imposing the tariffs reflected an overly broad interpretation of the authority delegated by Congress.
The 2–1 decision resulted in a permanent injunction prohibiting the collection of Section 122 duties, but only as to the prevailing plaintiffs: Burlap & Barrel, Inc., Basic Fun, Inc., and the State of Washington. The broader impact on other importers remains uncertain and will likely depend on further litigation and appellate review. On May 11, 2026, the Trump administration filed an emergency motion seeking to stay the CIT’s order.
The CIT emphasized that Section 122 constitutes a narrow delegation of authority from Congress to the Executive Branch and does not permit tariffs based on broadly defined economic conditions such as general trade or current account deficits.
The court declined to issue a nationwide injunction, concluding that most state plaintiffs lacked Article III standing because they were not importers of record and alleged only indirect economic harm. As a result, the ruling does not automatically provide relief to other importers.
Nevertheless, the court’s reasoning applies broadly to the Section 122 tariffs and is expected to influence future litigation, administrative actions, and appellate proceedings. Most observers anticipate a prompt appeal by the Department of Justice to the U.S. Court of Appeals for the Federal Circuit, along with continued efforts to stay the injunction. Following appellate review, the U.S. Supreme Court may ultimately decide whether to hear the case.
The decision does not affect other trade measures, including Section 232 tariffs, Section 301 tariffs, antidumping and countervailing duties, or quota programs.