More Tariff Refunds, Not So Fast? Court of International Trade Strikes Down Section 122 Tariffs — But Relief Is Limited to Plaintiffs

Why It Matters

The ruling invalidates a broad trade measure but offers no immediate relief to the majority of importers, creating legal and financial uncertainty across supply chains. Companies must act now to safeguard refund claims and renegotiate contract terms before further appellate outcomes.

Key Takeaways

• CIT declares Section 122 tariff unlawful but limits injunction to plaintiffs
• Non‑plaintiff importers still face tariff assessments and collection
• CAPE refund mechanism does not cover Section 122 tariffs
• Importers may need to litigate or protest to preserve refund rights
• Companies should revise contracts to address tariff pass‑through and refunds

Pulse Analysis

The Court of International Trade’s May 7 decision struck down Proclamation 11012, finding the 10 % Section 122 tariff beyond the President’s authority. Section 122 permits only temporary, targeted duties tied to acute balance‑of‑payments crises, not a blanket surcharge on all imports. By rejecting the administration’s justification based on a chronic trade deficit, the court reaffirmed statutory limits on emergency trade measures, yet it confined relief to the named plaintiffs, leaving the broader import community exposed.

For importers, the practical impact is stark. Customs and Border Protection will keep levying Section 122 duties on entries outside the injunction, and the Consolidated Administration and Processing of Entries (CAPE) system remains limited to IEEPA‑related refunds. Consequently, firms that have already paid the tariff must evaluate claim‑preservation tactics—such as filing a protest, initiating a CIT lawsuit, or amending existing IEEPA filings—to secure potential refunds. Simultaneously, companies should audit contracts to clarify tariff cost allocation, ensuring downstream customers are not left bearing unexpected charges.

Looking ahead, the administration is expected to appeal to the Federal Circuit and may seek a stay, which could temporarily pause collections. Even if the injunction expands, the Section 122 tariffs are set to expire in July 2026, and future trade actions may shift to Section 301 or Section 232 authorities, which carry different procedural safeguards. Importers should therefore adopt a dual strategy: prepare for immediate litigation or protest while building contractual resilience for any successor tariffs. This proactive approach mitigates risk and positions firms to recover costs if the legal landscape shifts.