Court strikes Section 122 tariffs

The U.S. Court of International Trade ruled on May 7 that the Trump administration’s 10% tariffs under Section 122 of the Trade Act of 1974 were unlawful, according to the court’s opinion and order. The three-judge panel entered a permanent injunction for Washington state and importer-plaintiffs Burlap and Barrel, Inc. and Basic Fun, Inc., and ordered refunds for those parties. The court dismissed the claims of 23 other states for lack of standing, leaving the relief narrower than a nationwide block. The ruling addressed Proclamation 11012, which imposed a temporary 10% ad valorem surcharge on nearly all U.S. imports effective February 24, 2026, according to the court record and trade-law summaries that reviewed the decision. The U.S. government appealed on May 8, several trade-law firms said in client updates summarizing the docket. ### Which tariffs did the court strike down? (cit.uscourts.gov) Proclamation 11012 imposed a 10% global import surcharge under Section 122, a statute that allows temporary action in response to balance-of-payments problems. The Court of International Trade said the administration exceeded the authority Congress delegated in that law, according to the opinion and multiple legal analyses published after the decision. (kpmg.com) The May 7 opinion was issued in consolidated cases brought by a coalition of states and by private importers. The court granted summary judgment and permanent injunctive relief only for Washington state, Burlap and Barrel, and Basic Fun, while dismissing the remaining state plaintiffs for lack of standing. ### Why are refunds limited to only some importers? The court’s order names the parties entitled to relief, and the injunction does not extend automatically to all importers. (kpmg.com) Dorsey & Whitney, Baker McKenzie and other trade-law analyses said the decision struck down the tariffs but limited refunds and collection relief to the successful plaintiffs for now. Washington state was the only state plaintiff that received injunctive relief. (cit.uscourts.gov) Burlap and Barrel and Basic Fun were the two private importer-plaintiffs named in the order. ### Did U.S. Customs start taking refund filings? U.S. Customs and Border Protection says it is using a system called CAPE inside the Automated Commercial Environment, or ACE, to process valid refund requests for duties imposed under the International Emergency Economic Powers Act, or IEEPA. (dorsey.com) CBP says Phase 1 of that process launched on April 20, 2026, and covers certain unliquidated entries and certain entries within 80 days of liquidation. (cit.uscourts.gov) CBP says importers of record and authorized customs brokers must use an ACE Secure Data Portal account, provide bank account information, and submit CAPE declarations through the portal. The agency says each declaration can include up to 9,999 entries. ### Is that Customs process for Section 122 refunds? CBP’s published refund page and fact sheet refer to IEEPA duty refunds, not Section 122 by name. (cbp.gov) That means the agency has publicly described an operational refund process for court-ordered IEEPA duties, while the May 7 court ruling separately created refund rights for the named Section 122 plaintiffs. Trade-law updates published after the ruling said other importers were still evaluating protests, litigation and refund strategies while the appeal proceeds. (cbp.gov) Those updates also said most importers remained outside the immediate scope of the injunction. ### What happens next in court and at the border? May 8 is the next concrete date in the case record cited by trade-law updates, because that is when the government appealed the May 7 ruling to the U.S. (cbp.gov) Court of Appeals for the Federal Circuit. CBP’s refund instructions remain posted on its ACE and IEEPA duty refunds pages for importers and brokers using the portal process. (kelleydrye.com) (perkinscoie.com)