CIT Limits Injunction in Section 122 Tariff Case; Appeals Court Stay Maintains Tariffs During Appeal
The Court of International Trade (CIT) ruled May 7, 2026, that the administration’s temporary Section 122 tariffs were unlawful but restricted its injunction to the case’s three plaintiffs. The 10 percent surcharge therefore remains in place for all other importers while the appeal proceeds.
The tariffs were issued in February after the Supreme Court held that IEEPA does not authorize broad import duties. The administration instead invoked Section 122, which allows short‑term surcharges of up to 15 percent for no more than 150 days in response to “large and serious” balance‑of‑payments deficits.
In a 2–1 decision, the CIT found that the administration failed to show the balance‑of‑payments conditions required under the statute and emphasized that Section 122 is a narrow, temporary tool tied to monetary pressures, not a general tariff authority. The court ordered the government to stop collecting the tariffs from the named plaintiffs and refund previously collected duties with interest.
The administration appealed to the U.S. Court of Appeals for the Federal Circuit, which on May 12 entered an administrative stay of the CIT’s injunction while it considered the government’s motion for a stay pending appeal. The Federal Circuit emphasized that the temporary stay did not address the merits of the dispute but preserved the status quo during expedited briefing. As a result, Customs can continue collecting Section 122 duties from the three plaintiffs during the appeal, and the tariffs remained fully in effect for all other importers.
On May 20, however, the CIT denied the government’s separate motion asking the trial court itself to stay its injunction pending appeal. The court rejected the administration’s arguments that suspending the injunction was necessary to protect trade negotiations, customs administration, foreign policy, and national or economic security. The CIT stated that those asserted harms were speculative, particularly because the injunction applied only to the three plaintiffs rather than nationwide. The court also emphasized that Congress, not the President, holds primary constitutional authority over tariffs and foreign commerce.
The CIT further concluded that the government had not shown a likelihood of success on appeal and reiterated that Section 122 is a limited balance-of-payments statute, not a broad delegation of tariff authority. Although the CIT refused to pause its own injunction, the Federal Circuit’s administrative stay continues to control unless and until the appellate court lifts it or rules on the broader stay-pending-appeal request. In practical terms, that means the injunction remains temporarily suspended while the Federal Circuit considers whether a longer stay should remain in place during the appeal.
The ruling comes as the administration continues to rely on other trade authorities, including active Section 232 national security reviews and ongoing Section 301 investigations focused on alleged unfair practices and industrial overcapacity.