Hello Customers, Colleagues, and Friends,
We would like to provide an important update regarding the ongoing litigation involving the Section 122 tariffs imposed under Proclamation No. 11012 after IEEPA Tariffs were struck down.
On May 20, 2026, the U.S. Court of International Trade (CIT) denied the government’s request to stay enforcement of the court’s judgment invalidating the Section 122 tariffs. This follows the CIT’s May 7, 2026 ruling that the President exceeded the authority granted under Section 122 of the Trade Act of 1974 by imposing tariffs based on a generalized trade deficit rationale.
The court emphasized that Congress — not the Executive Branch alone — holds constitutional authority over tariffs.
IMPORTANT: The Ruling Is Limited
Although the CIT found the Section 122 tariffs unlawful, the immediate practical effect is narrow.
The injunction currently applies only to the successful plaintiffs: Burlap and Barrel, Inc., Basic Fun, Inc., and The State of Washington and its instrumentalities.
The court also ordered refunds, with interest as provided by law, for Section 122 duties previously paid by those importer plaintiffs.
Federal Circuit Appeal Underway
The government has appealed the decision to the U.S. Court of Appeals for the Federal Circuit.
While the CIT denied the government’s stay request, the Federal Circuit separately entered a temporary administrative stay while it reviews the government’s appellate motion. This temporary stay is procedural and intended to preserve the status quo during the appeal process.
What This Means for Importers
- The CIT ruling currently applies only to the named successful plaintiffs
- Importers that are not parties to the litigation should continue assuming Section 122 duties remain payable
- CBP is expected to continue assessing and collecting Section 122 duties during the appeal process
- No broad suspension of Section 122 tariff collections has been announced at this time
- Additional court rulings or CBP guidance may impact future refund procedures or duty collection requirements
Krenz & Hannan will continue monitoring developments related to the Section 122 litigation, Federal Circuit proceedings, and any future CBP guidance regarding refunds or duty collection procedures. Please contact your Krenz & Hannan representative with any questions.
Sincerely, Your friends at Krenz and Hannan International