On May 7, 2026, the U.S. Court of International Trade (CIT) ruled that the 10% global tariffs imposed by the Trump administration in late February 2026 under Section 122 of the Trade Act of 1974 are unlawful. However, the CIT limited injunctive relief to plaintiffs found to have standing. Separately, U.S. Customs and Border Protection (CBP) is actively processing refunds of duties collected under the International Emergency Economic Powers Act (IEEPA), with the next update from CBP expected on May 12, 2026.
PART I: CIT Finds Section 122 Tariffs Unlawful but Declines to Issue Universal Injunction
A divided three-judge panel of the CIT held that the 10% ad valorem tariffs imposed under Section 122 of the Trade Act of 1974 exceed the president’s statutory authority. In a 2-1 decision authored by Chief Judge Mark A. Barnett and joined by Judge Claire R. Kelly, with Judge Timothy C. Stanceu dissenting, the court concluded that the presidential proclamation at issue improperly invoked Section 122’s “balance-of-payments deficits” authority to address what are, in substance, trade deficits and current account deficits.
The court declined to issue a universal injunction. Relief was limited to those plaintiffs found to have standing as importers of record: two private-importer plaintiffs and the state of Washington. In addition, relief extended only to shipments on which those plaintiffs are the importer of record. The court dismissed the claims of the remaining state plaintiffs for lack of standing, concluding that downstream purchasers alleging indirect harm from passed-through tariff costs had not demonstrated a concrete, non-speculative injury sufficient to satisfy Article III standing requirements. Although Washington established standing as a direct importer, the majority held that indirect harm to a single state plaintiff did not justify universal relief.
The Department of Justice filed a notice of appeal with the U.S. Court of Appeals for the Federal Circuit (CAFC) on May 8.
Practical Considerations for Importers
Section 122 tariffs remain in effect as to all importers who are not parties to this litigation. Absent further judicial action, CBP will continue to collect the 10% duties from non-party importers pending a ruling from the CAFC.
Importers that are not parties to this litigation should continue to comply with their Section 122 duty obligations and track relevant entry and liquidation dates with the goal of preserving their rights during the pendency of the appeal. Companies should also be aware that the administration has indicated it continues to pursue alternative tariff measures, including investigations under Sections 301 and 232. Such measures may be announced before the current Section 122 tariffs are scheduled to expire on July 24, 2026, absent earlier judicial intervention.
PART II: IEEPA Refund Process Update and Upcoming May 12 Status Conference
Separately, the refund process is continuing with respect to approximately $166 billion in duties previously collected under IEEPA, which the Supreme Court struck down on Feb. 20, 2026. CBP has deployed phase 1 of the Consolidated Administration and Processing of Entries (CAPE) functionality within the Automated Commercial Environment (ACE) to process IEEPA refund claims. A substantial number of filings have been submitted since the system opened in late April 2026. A significant number of entries have been accepted for refund processing, with liquidation and refund issuance under way, although a subset of submissions has been rejected for failing entry-specific validations.
As discussed in GT’s Alerts of March 30 and April 6, CAPE phase 1 covers approximately 82% of IEEPA entries and/or duty deposits. This includes unliquidated entries; entries with liquidation statuses of “Suspended,” “Extended,” or “Under Review”; warehouse and warehouse withdrawal entries; and entries liquidated within the preceding 80 days. CBP has not yet announced the scope of CAPE phase 2.
Only the importer of record is eligible to obtain refunds directly from CBP. Downstream parties who are not the importer of record may wish to evaluate whether contractual claims or negotiated agreements with the importer of record may provide a means of participating in any refunds that are recovered.
A further update on the status of IEEPA refunds is expected on May 12, which coincides with a closed status conference before the court.