The U.S. Court of International Trade (CIT) issued a decision invalidating Proclamation 11012, the February 2026 action that imposed a 10 percent across-the-board import surcharge under Section 122 of the Trade Act of 1974. The court determined that the Administration relied on economic indicators that did not meet the statutory requirements tied to “large and serious balance-of-payments deficits” under Section 122.
READ THE ORIGINAL PROCLAMATION HERE: PROCLAMATION 11012 IMPOSING A TEMPORARY IMPORT SURCHARGE TO ADDRESS FUNDAMENTAL INTERNATIONAL PAYMENTS PROBLEMS
WHY DID THE COURT INVALIDATE THE SECTION 122 TARIFFS?
The court concluded that Section 122 authority is limited to addressing specific balance-of-payments conditions contemplated by Congress when the Trade Act of 1974 was enacted. According to the majority opinion, the proclamation relied on current account deficits and trade deficits rather than the balance-of-payments metrics reflected in the statute’s legislative history.
WHO IS CURRENTLY IMPACTED BY THE INJUNCTION?
The permanent injunction currently applies only to the named plaintiffs:
- State of Washington
- Burlap & Barrel
- Basic Fun
The court ordered refunds with interest for duties collected from those parties under the Section 122 tariff program. Claims brought by twenty-three additional states were dismissed after the court found they had not demonstrated direct importer harm sufficient to establish standing.
HOW DOES THIS RELATE TO THE EARLIER IEEPA TARIFF DECISION?
The ruling follows the February 2026 Supreme Court decision involving tariffs imposed under the International Emergency Economic Powers Act (IEEPA). Together, the decisions signal continued judicial scrutiny of broad tariff actions implemented under temporary or emergency statutory authorities.
The ruling does not impact existing Section 232 or Section 301 tariff programs.
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