U.S. trade court refuses stay

The U.S. Court of International Trade’s latest move in the Section 122 tariff fight matters less for what it changed immediately than for what it clarified: the trial court is standing by its ruling that the Trump administration overreached. On May 20, the court refused to stay its own injunction against the administration’s Section 122 tariff orders, according to a legal summary by Reason. That came after the same court, in a 2-1 decision on May 7, had already struck down the 10% global import surcharge imposed under Section 122 of the Trade Act of 1974. ### Why was this tariff in court in the first place? On February 20, 2026, President Donald Trump issued Proclamation 11012 imposing a 10% import surcharge under Section 122 after the U.S. Supreme Court struck down tariffs the administration had imposed under the International Emergency Economic Powers Act, according to Dorsey & Whitney and Skadden summaries of the case. Section 122 allows temporary import measures when “fundamental international payment problems” require action to address “large and serious” U.S. balance-of-payments deficits. (reason.com) On May 7, 2026, a divided three-judge panel of the Court of International Trade held that the administration’s proclamation did not identify the kind of balance-of-payments deficit Congress had in mind when it enacted the statute in 1974. The court distinguished that concept from trade deficits, current-account deficits and a negative net international investment position, which the administration had cited instead. (jdsupra.com) ### What exactly did the trade court decide? The May 7 ruling held that the Section 122 tariffs were unlawful because the proclamation was unsupported by the statute, according to multiple law-firm analyses of the decision. The panel entered relief for the parties before it rather than broad nationwide relief, limiting the immediate benefit to the plaintiff-importers and Washington state. (jdsupra.com) Reason reported on May 20 that the court then refused to stay that injunction. That meant the trade court itself declined to pause the effect of its order while the government pursued an appeal. ### If the court refused a stay, why are importers still paying? On May 12, 2026, the U.S. (jdsupra.com) Court of Appeals for the Federal Circuit issued an administrative stay after the administration appealed, according to trade-law summaries and industry coverage. That appellate order kept the 10% surcharge in place while the appeal proceeds and delayed any refund obligation until there is a final judgment after appeals. (reason.com) Skadden said the practical impact of the trade court’s merits ruling is therefore limited for now. For importers that were not parties to the case, Customs continues to assess and collect the Section 122 tariff unless and until the appellate courts change that posture. ### Who brought the case, and how narrow was the relief? Oregon and 23 other states challenged the tariffs, and separate importer plaintiffs also sued, according to Reason and the legal briefings. (jdsupra.com) The Court of International Trade found that most of the states lacked standing because they were not importers of record, while granting relief to the importer plaintiffs and Washington state. (jdsupra.com) BakerHostetler said that narrow remedy could prompt additional complaints from importers seeking injunctions or refunds. Skadden said importers are reviewing duties they have paid and documentation they may need to preserve claims if the ruling is upheld. ### What should companies watch next? The Federal Circuit appeal is now the key venue. (reason.com) Skadden, Dorsey & Whitney and other trade lawyers said the case could eventually reach the U.S. Supreme Court, and the outcome will determine whether broader refunds become available. Section 122 also has a built-in time limit: the statute permits the surcharge for no more than 150 days unless Congress extends it, and Dorsey & Whitney said the administration had framed the measure as temporary while separate Section 232 and Section 301 tariff processes moved ahead in summer 2026. (jdsupra.com 1) (jdsupra.com 2) (jdsupra.com 3)