Importers navigating the current tariff landscape face a period of heightened uncertainty following two consequential rulings issued earlier this month. While the U.S. Court of International Trade has determined that the 10% global import surcharge imposed under Section 122 of the Trade Act of 1974 exceeded the President's statutory authority, the surcharge remains in effect pending appellate review. Companies with significant import exposure should act now to evaluate their position and preserve potential refund rights.
On May 7, 2026, a split 2-1 panel of the U.S. Court of International Trade held that President Trump's 10% global ‘temporary import surcharge’ exceeded the statutory authority granted under Section 122 of the Trade Act of 1974. The majority concluded that the measure was invalid and unauthorized by law, marking a significant judicial check on the executive branch's recent use of trade emergency tools to impose broad-based duties. The decision was closely watched across industries that have absorbed substantial additional duty costs since the surcharge took effect.
Any practical relief, however, was short-lived. On May 12, 2026, the U.S. Court of Appeals for the Federal Circuit entered an administrative stay suspending the CIT's order while the government's appeal proceeds. As a result, most importers will continue paying the 10% levies through at least July 2026, even though a trial-level court has declared the measure unlawful. The Federal Circuit's ultimate decision on the merits, expected in the coming months, will determine whether the duties remain in place or are vacated.
In the interim, importers should take affirmative steps to protect their interests. This includes carefully evaluating liquidation timelines for affected entries, considering the filing of protective protests or extension requests with U.S. Customs and Border Protection, and tracking the Federal Circuit appeal closely. Entries that liquidate without a protest in place may foreclose the possibility of obtaining refunds if the CIT's ruling is ultimately upheld on appeal. Coordinating with customs counsel and brokers to inventory exposure and align internal documentation is advisable while the appellate process unfolds.
This alert is intended as a general update and does not constitute legal advice. Clients with potential exposure to the Section 122 surcharge should consult counsel for guidance tailored to their specific circumstances.