Raising Or Resolving Importers’ Questions – Effects Of Section 122 Tariff Litigation

The U.S. Court of International Trade (CIT) recently entered an opinion and order (the Order) in the consolidated cases Oregon v. United States, Nos. 26-01472-3J, 26-01606-3JP slip. op. (Ct. Int’l Trade May 7, 2026), holding that President Trump’s Section 122 Tariffs were unlawful. The government appealed that decision to the U.S. Court of Appeals for the Federal Circuit (CAFC). The Section 122 tariffs at issue are part of President Trump’s efforts to replace the tariffs previously implemented under the International Emergency Economic Powers Act (IEEPA) and struck down by the Supreme Court in Learning Resources Inc. v. Trump, 146 S.Ct. 628 (2026). Although the CIT denied a motion to stay filed by the government, the CAFC imposed an administrative stay that will remain in effect until the CAFC rules on a separate motion to stay made by the government before that Court.
  
This litigation raises key questions for importers, including whether the Section 122 Tariffs are valid, and if they are not, the extent to which importers may be eligible to recover refunds for payment of Section 122 duties. In the wake of the CAFC granting an administrative stay, U.S. Customs and Border Protection (CBP) is set to continue collecting Section 122 Tariffs for the time being. Meanwhile, importers who have paid Section 122 Tariffs should stay abreast of the litigation and assess what steps may be appropriate to preserve their rights to tariff refunds.
  
As background, on May 7, the CIT issued an order granting a motion for summary judgment in the consolidated cases, Oregon v. United States. Plaintiffs included two private importers (the “Importer Plaintiffs”) and twenty-four states. These parties challenged the legality of Presidential Proclamation 11012 (Section 122 Proclamation), which, with certain exceptions, broadly imposed a global ten percent tariff on all imports entering the United States for 150 days (from February 24, 2026 to July 24, 2026). A panel of three judges at the CIT held that the Section 122 Proclamation was unlawful and granted a permanent injunction preventing the collection of Section 122 Tariffs. However, the injunctive relief was limited to only those Plaintiffs that the CIT held had standing. The permanent injunction is therefore not universal and did not provide tariff relief to importers who were not parties to the litigation, as well as several states involved in the action.
  
President Trump announced the Section 122 Proclamation the same day that the Supreme Court, in Learning Resources Inc., held that tariffs imposed by executive orders invoking the IEEPA were unlawful. The CIT’s decision in Oregon v. United States is the latest judicial challenge to the administration’s use of tariffs under novel legal provisions. However, the administration is also pursuing more traditional application of trade controls through alternative legal mechanisms under Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962.

Unlike in the Supreme Court’s decision with respect to the IEEPA tariffs in Learning Resources Inc., the CIT’s decision that the Section 122 Proclamation was invalid did not turn on whether tariffs, in general, are permissible under Section 122. Instead, the CIT focused on whether justifications for the ten percent tariffs were within the ambit of the authority granted to presidents to impose tariffs in accordance with Section 122. The CIT held that the justification provided by the administration in the Section 122 Proclamation for the ten percent tariffs exceeded the legal definition of “balance-of-payment deficits,” which is one element of a president’s authority to impose tariffs under Section 122.
  
The CIT also granted a permanent injunction against the application of Section 122 Tariffs that was limited only to certain Plaintiffs that the Court held had standing. The CIT held that the Importer Plaintiffs adequately alleged injury based on “imminent, if not actual, liability for payment of Section 122 duties.”  The CIT also held that Washington State adequately alleged injury because the University of Washington, a public research university, alleged that it received shipments of imports each month and expected to receive shipments of imports subject to Section 122 duties before the tariffs’ expiration in July 2026. The twenty-three other plaintiff states failed to demonstrate standing through an alternative argument of injury and were denied injunctive relief.
 
The legal landscape for all importers, including the plaintiffs in Oregon v. United States, is uncertain in light of the CIT’s holding that the tariffs put in place by the Section 122 Proclamation are invalid and the government’s pending appeal to the CAFC in which an administrative stay has been granted. Although CBP is set to continue collecting Section 122 Tariffs, this litigation has raised important questions as to whether relief, such as refunds, may ultimately be available, as well as which importers could qualify for refunds. Given recent action by CBP to establish the Consolidated Administration and Processing of Entries refund mechanism for IEEPA tariff refunds, it is an open question as to whether CBP might undertake a similar clearinghouse process for Section 122 Tariff refunds in the event that the CAFC rules that the Section 122 Tariffs are invalid. It is critical that importers who have paid Section 122 Tariffs stay vigilant and consider what steps to take to preserve their rights to receive tariff refunds.
  
Buchanan’s team of international trade and national security attorneys and government relations and international trade professionals is closely monitoring developments and is ready to help U.S. manufacturers with U.S. trade remedy laws and trade policy. Our dedicated team has decades of experience supporting clients across a range of industries – ranging from steel, chemical, rubber, mining, and agricultural products – to ensure that the U.S. market is operating under fair and equal conditions. 

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