Section 122 Ruling May 2026 - What it actually means

What did the Court of International Trade rule on Section 122 tariffs?

On May 7, 2026, the U.S. Court of International Trade (CIT) issued Slip Op. 26-47, a 2-1 decision holding that President Trump's Section 122 of the Trade Act of 1974 proclamation (Proclamation 11012) exceeded statutory authority because a long-running trade deficit is not a "fundamental international payments problem" within the meaning of 19 U.S.C. 2132. The CIT entered a permanent injunction for the three private plaintiffs (Burlap & Barrel, Basic Fun!, and the State of Washington) but declined to issue a universal injunction.

Are Section 122 tariffs still being collected after the ruling?

Yes, for nearly all importers. The injunction applies only to the three named plaintiffs. CBP continues to assess and collect the 10% Section 122 surcharge on imports from non-plaintiff importers while the Department of Justice appeals to the Federal Circuit (notice of appeal filed May 8, 2026, one day after the CIT decision).

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The CIT decision is the most significant Section 122 development since the proclamation took effect on February 24, 2026. The court agreed with the plaintiffs on the merits but limited relief to the named parties, creating an unusual interim state where the same tariff is legally unenforceable against three importers and fully enforceable against everyone else. Non-plaintiff importers facing material Section 122 exposure should evaluate whether to file protests, join future litigation, or wait for the Federal Circuit appeal to resolve. GingerControl's duty recovery service helps importers quantify recoverable Section 122 duties and preserve refund rights through the protest window. Book a no-cost consultation with Chen to discuss your exposure.

Last updated: May 2026

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What the CIT Actually Ruled

The CIT's 2-1 majority in State of Washington et al. v. Trump (Slip Op. 26-47) reached three core holdings [1]:

Holding	What it means
Section 122 is a balance-of-payments authority, not a trade-deficit authority	19 U.S.C. 2132 authorizes import surcharges only when "fundamental international payments problems require special import measures." A long-running goods trade deficit is not such a problem.
Proclamation 11012 exceeded that authority	The administration's justification did not satisfy the statutory predicate, so the proclamation is unlawful as to the plaintiffs before the court.
The court will not issue a universal injunction	Relief is limited to the named plaintiffs; CBP may continue collecting Section 122 duties on non-plaintiff entries pending appeal.

The court dismissed the claims of 23 other state attorneys general for lack of standing, finding the alleged economic harms too speculative. This narrowed the injunction to one state government instrumentality (the University of Washington) and two private importers.

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Who Gets a Refund Right Now

Three plaintiffs received the permanent injunction:

1. State of Washington (specifically the University of Washington as the state's instrumentality)
2. Burlap & Barrel, Inc. (a spice and culinary goods importer)
3. Basic Fun, Inc. (a toy and novelty importer)

For these three parties, Section 122 duties paid on entries already filed are subject to refund through the standard CBP reliquidation/protest pathway. For every other importer in the United States, Section 122 collection continues at 10% pending the Federal Circuit appeal.

GingerControl is AI global trade compliance infrastructure that helps importers, exporters, and customs brokers classify products, engineer optimal tariff positions, calculate duties, and track policy changes. The Section 122 ruling creates a refund-preservation window for non-plaintiff importers that will close as entries liquidate over the next 6-12 months.

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Why the Limited Injunction Matters

The CIT majority refused to issue a universal injunction even though it held Section 122 unlawful. The rationale [1] [2]:

• "The potential for increased costs to one plaintiff is not an appropriate basis for the imposition of a universal injunction."
• Universal injunctions raise separation-of-powers concerns and are disfavored absent extraordinary circumstances.
• The plaintiffs are made whole by an injunction limited to their own entries.

For non-plaintiff importers, the practical implication is significant. Under 19 U.S.C. 1514, the right to challenge a CBP duty determination through protest expires 180 days after liquidation. If an importer waits for the Federal Circuit (or SCOTUS) to affirm the CIT ruling on the merits, many Section 122 entries will have liquidated and the protest window will have closed. The only legally available pathway to preserve refund rights for those entries is to file a protest within 180 days of liquidation while the issue is being litigated [3].

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What Happens Next: Federal Circuit Appeal Timeline

The Department of Justice filed its notice of appeal on May 8, 2026, one day after the CIT decision [2]. Realistic timeline:

Stage	Estimated timing
Federal Circuit briefing schedule	June-August 2026
Federal Circuit oral argument	September-October 2026 (could be expedited)
Federal Circuit decision	Late 2026 or early 2027
Possible petition for SCOTUS certiorari	2027
Section 122 statutory expiration	July 24, 2026

The Section 122 statutory expiration on July 24, 2026 may resolve the practical question before the appellate process resolves the legal question. If Section 122 lapses at the 150-day mark without renewal, the only remaining question becomes whether duties already paid are refundable, not whether the tariff continues.

For more on the expiration timing, see When Do Section 122 Tariffs Expire?.

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What Importers Should Be Doing This Week

Based on the ruling and the Section 122 expiration calendar, four actions are time-sensitive:

1. Quantify Section 122 exposure across your entry history. Pull every entry summary from February 24, 2026 onward. Identify the Section 122 line on each (filed under the relevant Chapter 99 heading). Total dollars at risk = total dollars potentially recoverable if the CIT ruling stands or is affirmed.
2. Map the liquidation schedule for each affected entry. Liquidation typically occurs ~314 days after entry, but accelerated and deemed liquidation can shift the date. Each liquidation date starts a 180-day protest clock under 19 U.S.C. 1514.
3. File a protective protest for any entry approaching liquidation. A timely protest preserves refund rights even if the underlying issue is still being litigated. Waiting for the Federal Circuit is operationally indistinguishable from waiving the right for entries that liquidate first.
4. Evaluate whether to join litigation. Some importers may choose to file their own action in the CIT to obtain a direct injunction rather than relying on protest preservation alone.

GingerControl's duty recovery service helps importers complete each of these four steps, quantifying exposure through full tariff stack analysis and producing the entry-level documentation that supports protest filings.

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Frequently Asked Questions

Does the CIT ruling stop CBP from collecting Section 122 tariffs?

Only on entries by the three named plaintiffs (State of Washington, Burlap & Barrel, Basic Fun!). For all other importers, CBP continues to assess and collect the 10% Section 122 surcharge while the Federal Circuit appeal is pending.

Can I claim a Section 122 refund based on the CIT ruling if I am not a plaintiff?

Not automatically. You can preserve your right to a refund by filing a protest under 19 U.S.C. 1514 within 180 days of liquidation of each affected entry. A protest preserves the refund question pending final resolution by the Federal Circuit or SCOTUS.

What is the deadline to file a protest on Section 122 duties?

180 days from the date of liquidation of the entry, not from the date of entry or date of payment. Liquidation typically occurs around 314 days after entry, so the protest window for early Section 122 entries (February-March 2026) closes in late 2026 through mid-2027.

Will the Federal Circuit affirm the CIT ruling?

Unknown. The Federal Circuit reviews CIT decisions de novo on questions of law. The administration's appellate strategy is not yet public. Trade analysts have noted that Section 122's July 24, 2026 statutory expiration may moot much of the practical dispute before the appeal resolves.

What happens if Section 122 expires on July 24, 2026?

Tariff collection stops on July 25, 2026. The legal question of whether duties already paid are refundable remains live and is what the protest preservation strategy is designed to protect.

How is this different from the IEEPA refund process?

The Supreme Court ruled IEEPA tariffs unlawful in February 2026, and CBP established the CAPE refund pathway for affected entries. The CIT Section 122 ruling is at an earlier stage: the merits ruling exists but no nationwide refund process has been created, and the appeal could still reverse the ruling. The protest pathway under 19 U.S.C. 1514 is the closest analog.

Should I contact a trade attorney now?

For exposure above seven figures, yes. The decision tree (protest, join litigation, wait, or do nothing) has different financial and legal implications by exposure size and entry profile. Book a call with Chen to discuss your exposure and the recovery pathway that fits your situation.

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Take Action Before the Protest Window Closes

If your company paid Section 122 duties on imports since February 24, 2026, you may have a refund opportunity but the window for protecting that opportunity is opening and closing entry by entry as liquidations come through. GingerControl's duty recovery service quantifies Section 122 exposure, maps the liquidation schedule across your entries, and supports protest filings under 19 U.S.C. 1514. Book a no-cost recovery consultation with Chen to start.

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Related Articles

• When Do Section 122 Tariffs Expire? July 24, 2026 Deadline Explained
• Section 122 Tariff Calculator Guide
• Section 122 Tariff Monitoring and Updates
• IEEPA Tariff Refund Guide

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References

[REF 1] U.S. Court of International Trade, Slip Op. 26-47, State of Washington et al. v. Trump, May 7, 2026 Source: CIT Slip Op. 26-47

[REF 2] Holland & Knight, U.S. Court of International Trade Invalidates the Administration's Section 122 Tariffs Source: Holland & Knight

[REF 3] 19 U.S.C. 1514, Protest against decisions of Customs Service Source: Cornell LII

[REF 4] Snell & Wilmer, More Tariff Refunds, Not So Fast? Court of International Trade Strikes Down Section 122 Tariffs Source: Snell & Wilmer