Section 122 Tariffs: CIT Struck Down, CAFC Stay Active — 51 Days to July 24 Expiration

Section 122 tariffs are still being collected — and that surprises a lot of importers who saw the "tariffs struck down" headlines in May.

Here's where things actually stand as of June 3, 2026: the Court of International Trade ruled Section 122 unlawful on May 7. The government appealed to the Federal Circuit on May 8. The CAFC issued an administrative stay on May 12 that suspends the CIT's injunction entirely. CBP hasn't stopped collecting a single dollar from anyone except the three original plaintiffs.

The tariff expires by statute on July 24 — 51 days from now. After that, it's gone regardless of what the courts decide.

Your single most important action right now: file CBP protests on every liquidated entry since February 24. The 180-day protest window is closing on the earliest entries, and without a timely protest, you lose your right to a refund forever — even if the courts ultimately confirm the tariff was illegal.

Need to see your duty breakdown? Use our tariff calculator — it shows every layer (MFN + Section 122 + 301 + 232) for any HTS code.

By VatCheck Research Team. Sources: Court of International Trade slip opinions (Oregon v. Trump, No. 26-00058; Burlap & Barrel v. Trump, No. 26-00061), CAFC Administrative Stay Order (May 12, 2026), Presidential Proclamation of February 20, 2026, Trade Act of 1974 §122, Federal Register Vol. 91, CBP CSMS bulletins, Congressional Research Service R48435, Fortune (June 1, 2026).

What Happened: The Full Timeline

Most analyses cover the CIT ruling but miss the cascade of events since. Here's the complete sequence:

| Date | Event | Impact | |---|---|---| | Feb 20, 2026 | President issues Proclamation 11012 under Section 122 | 10% surcharge on virtually all imports effective Feb 24 | | Mar 4, 2026 | Rate increased from 10% to 15% | Rate escalation with no separate statutory basis | | May 7, 2026 | CIT rules Section 122 tariffs unlawful (2-1, Oregon v. Trump) | Limited injunction — only 3 plaintiffs get relief | | May 8, 2026 | Government files notice of appeal to CAFC | Signals intent to fight | | May 12, 2026 | CAFC issues administrative stay | Suspends CIT injunction — tariff collection continues for everyone | | May 19, 2026 | Plaintiffs' response brief due on stay motion | Expedited schedule — 3-5x faster than normal | | ~May 22, 2026 | Government reply due on stay motion | Briefing closes | | June 2, 2026 | Trump admin appeals IEEPA nationwide refund order | Signals aggressive posture on ALL tariff refund programs | | June 5-19 | CAFC expected to rule on stay-pending-appeal | Decision on whether stay continues through merits appeal | | July 24, 2026 | Section 122 expires by statute (150-day limit) | Tariff ends regardless of court outcomes |

The CIT Ruling: What the Court Actually Said

Judge Aquilino, writing for the majority, rejected the government's core argument — that the U.S. goods trade deficit constitutes a "large and serious" balance-of-payments deficit under Section 122.

The court drew a critical distinction: a trade deficit (the gap between imports and exports of goods) is not the same as a balance-of-payments deficit (which includes services, investment income, and capital flows). The U.S. runs a goods trade deficit, but the overall current account has been manageable for decades. Section 122 was designed for genuine balance-of-payments emergencies — the kind that forced Nixon to close the gold window in 1971 — not chronic trade imbalances.

Three specific holdings:

1. No qualifying emergency existed. The trade deficit the administration cited has been a structural feature of the U.S. economy since the 1970s. A 50-year-old condition isn't "imminent" under any reading of the statute.

2. The exemptions undermined the rationale. If the tariff were truly about balance-of-payments, exempting 1,655 HTS entries — including entire categories like civil aircraft, energy products, and critical minerals — contradicts the emergency claim. You can't claim an emergency and then carve out whatever's politically inconvenient.

3. The rate increase was unauthorized. The original proclamation set the rate at 10%, then raised it to 15% twelve days later. The court found this escalation had no independent statutory justification.

Judge Baker dissented, arguing that courts should defer to presidential findings on economic conditions and that the trade deficit is sufficient evidence of payment imbalances.

Why the Injunction Is So Narrow

The CIT only enjoined collection for three parties — Burlap & Barrel (a spice importer), Basic Fun! (a toy company), and the State of Washington. Twenty-four state attorneys general were also plaintiffs, but the court declined a nationwide injunction.

For the other 329,997 importers paying Section 122 tariffs, nothing changed operationally. And even for those three plaintiffs, the CAFC's May 12 stay suspended their relief.

Why no nationwide injunction? Two factors: the tariff expires in weeks anyway (courts avoid sweeping orders when the harm has a built-in expiration), and the government's immediate appeal made broader relief procedurally risky.

The CAFC Stay: What It Means (And What It Doesn't)

On May 12, the Federal Circuit issued an administrative stay — a procedural pause that preserves the status quo while the court considers the government's motion for a longer-lasting stay pending appeal.

What the stay does:

• Suspends the CIT's judgment and injunction entirely
• CBP continues collecting Section 122 tariffs from all importers
• Even the three named plaintiffs are back to paying while the stay holds

What the stay doesn't do:

• It doesn't mean the CAFC agrees with the government on the merits
• It doesn't change the July 24 expiration date
• It doesn't affect your right to file protests

CAFC Briefing Schedule (Expedited)

The court set an unusually fast schedule for the stay-pending-appeal motion:

| Event | Date | |---|---| | Plaintiffs' response brief | ~May 19, 2026 | | Government reply | ~May 22, 2026 | | Briefing closed | Late May 2026 | | Expected ruling on stay | June 5-19, 2026 |

This schedule ran 3-5x faster than the standard CAFC motion calendar — a signal the court views the stay question as time-sensitive given the July 24 expiration.

Merits Appeal Timeline

The actual merits appeal — whether Section 122 authorized the tariffs — follows a longer track:

| Event | Expected Date | |---|---| | Government's opening brief | ~40 days after notice (mid-June 2026) | | Appellees' brief | ~30 days later (mid-July 2026) | | Reply brief | ~14 days later (late July 2026) | | Oral argument | Fall 2026 | | CAFC decision | Late 2026 or early 2027 |

The practical reality: By the time the CAFC rules on the merits, Section 122 will have already expired. The merits appeal matters only for refunds — not for ongoing collection.

The June 2 Bombshell: Trump Admin Appeals IEEPA Refund Order

On June 2, the Trump administration filed an appeal challenging the CIT's March 4 order compelling CBP to refund all importers who paid IEEPA tariffs — not just the plaintiffs who sued.

This is technically about IEEPA tariffs, not Section 122. But it matters for Section 122 importers for three reasons:

1. It signals the government's posture on ALL tariff refunds. If they're fighting universal IEEPA refunds ($166 billion), they'll fight even harder against Section 122 refunds where the legal basis is weaker (CIT ruling vs. Supreme Court ruling).

2. The legal theory applies broadly. The government argues that courts can't issue "universal injunctions" covering non-plaintiff importers. If this argument succeeds at the CAFC for IEEPA, it creates precedent that could limit Section 122 refunds too.

3. CBP resources are stretched. Processing $166 billion in IEEPA refunds through CAPE while simultaneously handling Section 122 protests means delays across the board.

Bottom line: Don't assume refunds are automatic. File your protests, preserve your rights, and prepare for a longer fight than the initial "tariffs struck down" headlines suggested.

Your Refund Options: Three Paths

Path 1: File CBP Protests (Recommended for Everyone)

Under 19 USC § 1514, you can protest any duty assessment within 180 days of liquidation. The CIT ruling gives you a legal basis: Section 122 has been found unlawful by a federal court.

Step-by-step:

1. Pull your entry summary data from ACE for entries since February 24, 2026
2. Identify entries with Section 122 duty lines (Chapter 99 subheadings)
3. File CBP Form 19 (Protest) for each liquidated entry within the 180-day window
4. Cite Oregon v. Trump (CIT No. 26-00058) as the legal basis
5. Request suspension of the protest pending the CAFC appeal — CBP typically grants this

URGENCY — The clock is running:

Entries from February 24-28 are now 99 days old. Once they liquidate (typically 300-314 days after entry), the 180-day window begins. The earliest entries will start liquidating in December 2026-January 2027, giving you until roughly June-July 2027 for those. But entries that were accelerated or pre-liquidated have shorter windows. Check your ACE records now.

Your customs broker can file protests on your behalf. Our CBP customs protest guide walks through the process in detail.

Path 2: Wait for the CAFC Decision

If the Federal Circuit affirms the CIT ruling, CBP would need to process refunds for all importers who filed timely protests.

Risk: This could take 12-18 months. And with the government appealing universal refund authority on IEEPA, the legal landscape for non-plaintiff refunds is less certain than it was a month ago. Don't rely on this path alone — file protests regardless.

Path 3: Join Pending Litigation

Multiple additional lawsuits are pending at the CIT. Some trade associations are filing class-wide actions that could provide broader relief.

Check with your trade counsel whether joining a case makes sense for your volume of Section 122 entries. Given the government's challenge to universal injunctions, being a named plaintiff has more value than it did before June 2.

How Section 122 Interacts With Other Tariff Programs

Section 122 + IEEPA Refunds (CAPE)

The IEEPA tariff refund process through the CAPE portal is completely separate from Section 122. Here's the distinction:

| | IEEPA Refunds (CAPE) | Section 122 Refunds (Protests) | |---|---|---| | Legal basis | Supreme Court ruling (Feb 20, 2026) | CIT ruling (May 7, 2026) — on appeal | | Current threat | Trump admin appealing nationwide refund order (June 2) | CAFC stay suspends CIT injunction | | Refund mechanism | CAPE portal (automated) | CBP protests (manual) | | Status | $20.6B disbursed; $85B accepted | Pending CAFC merits ruling | | Timeline | 45-60 days after acceptance | 12-18 months (best case) | | Entries covered | IEEPA tariffs (Feb 2025 – Feb 2026) | Section 122 tariffs (Feb 24, 2026 – present) |

If you paid both IEEPA and Section 122 tariffs on the same entries: file through CAPE for the IEEPA portion and file a protest for the Section 122 portion. They're independent processes with separate legal tracks.

Check your IEEPA eligibility: Use our refund calculator.

Section 122 + Section 301

Section 301 investigations — the likely replacement for Section 122 — are barreling toward completion. Public hearings ran April 28 through May 8 covering 60+ countries. Post-hearing rebuttal comments were due May 15. The Section 301 hearing results guide covers the specifics.

The administration's strategy is transparent: get Section 301 tariffs ready before Section 122 expires on July 24. For importers, this means the 15% Section 122 surcharge may be replaced by country-specific Section 301 rates — not eliminated.

Section 122 + Section 232

Products already subject to Section 232 tariffs (steel at 50%, aluminum at 50%, copper at 50%) are exempt from Section 122 under the proclamation's Annex II. No stacking occurs.

Updated Scenarios After July 24

The CAFC stay and the government's aggressive legal posture reshape the probabilities. Here's my updated assessment as of June 3:

Scenario 1: Section 301 Replacement Tariffs (55% probability — up from 50%)

The administration is pushing hard to finalize country-specific Section 301 tariffs before July 24. With the CAFC stay in hand — meaning Section 122 collection continues uninterrupted through July 24 — there's less urgency to rush. But the political desire for seamless transition from one tariff regime to the next is strong.

Section 301 targets two tracks:

• 16 economies for manufacturing overcapacity (China, EU, Japan, India, Mexico, Vietnam, South Korea, Taiwan, and others)
• 60 countries for forced labor enforcement failures

What this means: Country-specific rates could be higher or lower than 15%. China almost certainly faces higher rates. Japan, EU, and South Korea might start lower. Our calculator shows the current stacking for any HTS code.

Scenario 2: Gap Period With No Replacement (35% probability — down from 40%)

The CAFC stay makes this slightly less likely — the government has more breathing room to prepare replacements. But USTR's investigation timeline is compressed. If findings aren't published by mid-July, Section 301 tariffs can't take effect before Section 122 expires.

Biggest beneficiaries of a gap period:

| Product Category | Current Rate (With S.122) | Gap Rate | Savings | |---|---|---|---| | Furniture from Vietnam (HTS 9403.60) | 15% | 0% | 15 pts | | Apparel from Bangladesh (HTS 6204.43) | 31.6% | 16.6% | 15 pts | | Electronics from Taiwan (HTS 8471.30) | 15% | 0% | 15 pts | | Machinery from India (HTS 8479.89) | 17.5% | 2.5% | 15 pts | | Coffee from Colombia (HTS 0901.11) | 15% | 0% | 15 pts |

For the complete breakdown of how tariff layers stack, see our formula guide.

Scenario 3: Congressional Extension (10% — unchanged)

Still unlikely. Extending a tariff that a court found unlawful is politically toxic. The Reclaim Trade Powers Act has bipartisan support. And the statutory mechanism for extension requires affirmative congressional action — it doesn't happen by default.

Products Already Exempt From Section 122

The proclamation's Annex II contains 1,655 exempt HTS entries:

| Category | Why Exempt | Key HTS Chapters | |---|---|---| | Critical minerals | National security / supply chain | Various (lithium, cobalt, rare earths) | | Energy products | Oil, gas, coal, nuclear fuel | HTS 2709-2716 | | USMCA-qualifying goods | Trade agreement preference | Any (with USMCA certification) | | Section 232 products | Already face 50% tariff | Chapters 72-73 (steel), 76 (aluminum), 74 (copper) | | Pharmaceuticals & APIs | Health exemption (until July 31) | Chapter 30 | | Civil aircraft & parts | Aviation exemption (546 HTS entries) | Chapter 88 + components |

Check your product: Run your HTS code through our calculator to see whether Section 122 applies to your classification.

Five Steps to Take Right Now

1. File Protests — Today, Not Tomorrow

For every entry since February 24 that has liquidated, file a CBP protest citing Oregon v. Trump. Your customs broker can handle this. The 180-day window after liquidation is absolute — miss it and you're out permanently.

The CBP customs protest guide has the full walkthrough including Form 19 instructions.

2. Model Both Scenarios in Your Cost Sheets

Run every active SKU through two calculations: current rates and post-July-24 rates (with and without Section 301 replacement). Our calculator shows the full stack. Build contingency pricing for each outcome.

3. Time Your Shipments Strategically

If the gap period (Scenario 2) looks likely as we approach July:

• Delay non-urgent shipments past July 24 to avoid the 15% surcharge
• CBP uses the date of entry for tariff determination, not the ship date
• Goods in bonded warehouses or FTZs can wait until rates change

If replacement 301 tariffs are announced with higher rates for certain origins:

• Accelerate shipments from those countries before the new rates take effect
• China, Vietnam, and India are the highest-risk origins for rate increases

4. Review Your Exemption Status

Cross-check your HTS codes against the 1,655-entry Annex II exempt list. If you've paid Section 122 on exempt products, file protests immediately — you don't even need the CIT ruling; the exemption is statutory.

Products qualifying under USMCA are also exempt. If you import from Canada or Mexico, verify your certificates of origin are current.

5. Watch Two Dockets

The Federal Circuit is considering two critical issues simultaneously:

1. Section 122 stay-pending-appeal — ruling expected June 5-19
2. IEEPA universal refund appeal — government's brief due by June 7

Both outcomes will signal how aggressive the government intends to be on tariff refunds broadly. Subscribe to CBP's CSMS bulletins and check our Federal Register updates for developments.

Key Dates to Watch

| Date | Event | |---|---| | ~~May 7~~ | ~~CIT strikes down Section 122 (2-1 ruling)~~ | | ~~May 8~~ | ~~Government appeals to CAFC~~ | | ~~May 12~~ | ~~CAFC issues administrative stay~~ | | June 5-19 | CAFC expected ruling on stay-pending-appeal | | June 7 | Deadline for IEEPA universal refund appeal brief | | Mid-June | Government's CAFC opening brief on Section 122 merits | | Mid-June | USTR preliminary Section 301 findings expected | | June 30 | Commerce copper report due — Section 232 impact | | July 24 | Section 122 EXPIRES by statute (150-day limit) | | July 31 | Pharmaceutical 100% tariff begins | | Late 2026 | CAFC merits decision expected |

Frequently Asked Questions

Did the CIT ruling stop Section 122 collection?

No. The CAFC's May 12 administrative stay suspended the CIT's injunction. CBP collects Section 122 tariffs from all importers — including the three original plaintiffs whose injunction was stayed. This continues until either the CAFC lifts the stay or the tariff expires on July 24, whichever comes first.

Should I file a protest even though the tariff expires July 24?

Absolutely. Filing a protest preserves your right to a refund on duties already paid since February 24. You're looking at 5 months of 15% surcharges. For a mid-size importer doing $5 million in annual imports, that's approximately $375,000 in potential recovery, plus statutory interest. Without a protest, no refund — regardless of court outcomes.

Does the Trump administration's IEEPA refund appeal affect Section 122?

Not directly — the June 2 appeal targets the IEEPA nationwide refund order, not Section 122. But the legal argument (that courts can't issue universal injunctions covering non-plaintiff importers) could create precedent that limits Section 122 refunds too. This makes filing individual protests even more important — if universal relief is restricted, only importers who independently preserved their rights will have claims.

How much could I recover if the CAFC upholds the CIT ruling?

Every dollar of Section 122 duty paid since February 24, 2026 — plus statutory interest at 5-6% annually. For a mid-size importer doing $5 million in annual imports, that's roughly $375,000 in principal recovery for the ~5 months of collection.

Can I claim both IEEPA refunds (CAPE) and Section 122 refunds (protest)?

Yes. They're separate tariff programs with separate legal bases. If you paid both on the same shipment, file through CAPE for IEEPA and file a CBP protest for Section 122. Our refund eligibility checker covers the IEEPA side.

What if my entries haven't liquidated yet?

Your 180-day protest window hasn't started yet — it begins at liquidation. Track your liquidation dates using the ES-701 Courtesy Notice of Liquidation report in ACE. File your protest as soon as each entry liquidates.

What will replace Section 122 after July 24?

Most likely country-specific Section 301 tariffs. The Section 301 investigation hearings completed May 5-8 covering 60+ countries. Rates will vary by country — China faces higher rates, while allies like Japan and South Korea may face lower rates. A gap period between Section 122 expiration and Section 301 implementation remains possible.

Will Section 122 refunds go through the CAPE portal?

Unlikely. CAPE was built specifically for IEEPA refunds. Section 122 refunds would follow the standard CBP protest refund process under 19 USC § 1514. If volume is large enough, CBP may create a streamlined mechanism — but given how stretched they are processing $166 billion in IEEPA refunds, don't expect anything fast.

---

Last updated: June 3, 2026. Section 122 is under active litigation (CAFC stay in effect, merits appeal pending). CBP continues collecting. The Trump administration's June 2 IEEPA refund appeal adds uncertainty to all tariff refund programs. For current rates on specific HTS codes, use our calculator. This is not legal advice — consult trade counsel for protest strategy.