CIT Voids 10% Section 122 Surcharge for Three Importers, All Others Still Pay

RGFIII
May 11
3 min read

On May 7, 2026, the U.S. Court of International Trade ruled the 10% Section 122 surcharge unlawful, but the relief reaches only three named importers. For everyone else, the duty keeps running until the statutory sunset on July 24, 2026.

BOTTOM LINE

If you are not one of the three named plaintiffs, the 10% Section 122 surcharge still applies to your entries. The May 7 ruling did not stop the duty for the rest of the importing community.

CRITICAL: 10% SURCHARGE STILL IN EFFECT

The CIT ruling applies ONLY to three named importer plaintiffs. All other importers must continue to pay the 10% Section 122 surcharge under CBP CSMS #67844987. There is no universal injunction, no rescission proclamation, and no superseding CBP guidance. The Proclamation sunsets July 24, 2026 absent extension.

Current Status for All Other Importers

The 10% Section 122 surcharge remains in effect for all non-party importers. CBP continues to assess Section 122 duties under Cargo Systems Messaging Service (CSMS) #67844987 issued February 23, 2026. As of the date of this advisory:

The CIT has issued no post-ruling guidance for importers outside the named plaintiffs.
CBP has not published a superseding CSMS bulletin.
The White House has not modified or rescinded Proclamation 11012.
Absent congressional extension, the Proclamation expires by its own terms at 12:01 a.m. EST on July 24, 2026, the end of the 150-day statutory cap.

Who Is Affected by the Ruling

The court issued a permanent injunction (a court order permanently blocking collection of the duty) only as to the named importer plaintiffs. The 23 non-importer state plaintiffs were dismissed for lack of standing (the legal right to bring the case, which generally requires direct financial harm). The court expressly refused to issue a universal injunction.

Named Plaintiffs: permanent injunction in force, refunds with interest, 0% Section 122 duty rate as of May 7, 2026.

All Other Importers: no injunction, no refunds, 10% Section 122 duty rate still owed through the July 24, 2026 sunset.

Named plaintiffs are: State of Washington (through the University of Washington), Burlap and Barrel, Inc., and Basic Fun, Inc..

What the Court Ruled

On May 7, 2026, the U.S. Court of International Trade issued Slip Opinion 26-47 in State of Oregon v. United States and the companion case Burlap and Barrel, Inc. v. United States. In a 2-1 decision, the court held that Proclamation 11012, which imposed the 10% temporary import surcharge under Section 122 of the Trade Act of 1974 effective February 24, 2026, is unlawful.

The majority concluded that the President did not identify a balance-of-payments deficit as Congress understood that term in 1974. The Proclamation instead pointed to the trade deficit, the current account deficit, and the negative U.S. net international investment position. In plain terms, the court said the President identified general trade and investment imbalances, not the specific kind of payment shortfall the 1974 law requires. The court ruled the Proclamation ultra vires, a Latin term meaning the President acted beyond the authority Congress gave him. Judge Stanceu dissented.

What Happens Next

We anticipate the government will appeal to the U.S. Court of Appeals for the Federal Circuit (the federal appellate court that hears customs and trade cases) and seek a stay pending appeal. Given the dollar amounts at stake and the constitutional questions raised, this case may ultimately reach the U.S. Supreme Court. That would follow the same path as Learning Resources, Inc. v. Trump, which the Supreme Court decided on February 20, 2026 and which struck down the IEEPA-based tariffs.

What We Are Doing

Fleischer is monitoring the CIT and Federal Circuit dockets, CBP guidance channels, and the Federal Register continuously. We will issue follow-up advisories as the appeal posture clarifies and as any agency guidance is released. We are also maintaining records of Section 122 duty assessments on entries we file so that information is organized and available should circumstances change.

Fleischer clients paying Section 122 duties: please expect follow-up details and further information at a later date. The procedural path forward remains unconfirmed and this advisory is informational only.

References

State of Oregon v. United States and Burlap and Barrel, Inc. v. United States, Slip Op. 26-47, U.S. Court of International Trade (May 7, 2026)
Proclamation 11012, Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems, 91 Fed. Reg. 9339 (Feb. 25, 2026)
Section 122 of the Trade Act of 1974, 19 U.S.C. § 2132
Learning Resources, Inc. v. Trump, 146 S. Ct. 628 (2026)
CBP CSMS #67844987, Imposing Temporary Section 122 Duties (Feb. 23, 2026)

This advisory is provided for informational purposes only as of May 11, 2026. Trade regulations, executive orders, and tariff classifications are subject to frequent change. Nothing herein constitutes legal advice. Richard G. Fleischer Customs Brokers encourages all importers to consult with a licensed customs broker or qualified trade counsel regarding their specific circumstances. Published May 11, 2026.