The CIT Just Struck Down the 10% Section 122 Tariffs — Here's What That Means for Your Refunds

Two court rulings in five days changed the picture for the 10% Section 122 surcharge collected at the border from February 24 through July 24, 2026. The collection period has now ended, but that does not create an automatic refund. This post explains what each ruling does, why CAPE does not reach Section 122, and the three refund paths importers should evaluate for duties already paid.

Section 122 in One Paragraph

Section 122 of the Trade Act of 1974 (19 USC § 2132) lets the President impose a temporary import surcharge of up to 15% for up to 150 days, unless Congress extends it, to address fundamental international payment imbalances. Proclamation 11012 imposed a flat 10% surcharge on most U.S. imports from February 24 through July 24, 2026. That collection period has ended. Section 122 has its own HTS classification and is completely separate from the IEEPA tariff regime that ran from February 2025 through February 2026 and that CAPE was built to refund. Source: White House, Proclamation 11012.

If you paid duties during that period, pull the relevant ACE entry summaries and look for the Section 122 HTS line. That is your refund-exposure starting point.

What the May 7 CIT Ruling Actually Says (and Doesn’t)

On May 7, 2026 the U.S. Court of International Trade held that the Section 122 surcharge in Proclamation 11012 exceeded the President’s statutory authority under 19 USC § 2132. The CIT’s relief was directed to the named plaintiffs in the case, not the broader importing community.

What the ruling does:

• Establishes a CIT-level holding that the 10% surcharge is unlawful as imposed.
• Gives the named plaintiffs a procedural basis for refunds, subject to the appeal.
• Strengthens the legal arguments any other importer can raise in a parallel CIT complaint or in a protest.

What the ruling does not do:

• It does not issue a nationwide injunction.
• It does not order CBP to stop collecting the 10% surcharge.
• It does not create any administrative refund program for non-plaintiffs.
• It does not affect CAPE Phase 1 in any way — CAPE was already scoped exclusively to IEEPA duties and continues processing those refunds on its own track.

The May 12 Federal Circuit Stay

Five days later, on May 12, 2026, the U.S. Court of Appeals for the Federal Circuit stayed the CIT order pending appeal. The practical effect:

• CBP continued collecting the 10% Section 122 surcharge while the statutory collection period remained open.
• The stay prevented the named plaintiffs from receiving the ordered relief while the appeal proceeded.
• The legal question moves to the Federal Circuit on appeal.

A stay is not a reversal. The Federal Circuit has not decided the merits; it has only paused the relief. The CIT’s reasoning is still on the books and is still the most authoritative judicial statement on Section 122 to date.

Why CAPE Doesn’t Reach Section 122

CAPE Phase 1 was built around a very specific legal posture:

• Statutory basis: IEEPA (50 USC §§ 1701-1710), which the Supreme Court held does not authorize tariffs (Learning Resources, Inc. v. Trump, February 20, 2026).
• HTS scope: subheadings 9903.01.25 through 9903.01.70 — the IEEPA Chapter 99 tags only.
• Time window: duties collected from approximately February 2025 through February 24, 2026.

Section 122 sits outside every one of those parameters:

• Different statute (19 USC § 2132, not IEEPA).
• Different HTS code (Section 122 has its own Chapter 99 line).
• Different time window (started February 24, 2026 — the same day IEEPA collections ended).

That separation is why nothing in CBP’s CAPE messaging, the official CAPE Declarations and Error Definitions PDF, or Judge Eaton’s CIT progress orders touches Section 122. CAPE is not going to expand sideways to cover it; if a refund mechanism develops, it will be a separate workflow and likely on a slower timeline.

Three Refund Paths to Evaluate

For Section 122 duties paid from February 24 through July 24, 2026, importers currently have three paths. Most material exposures will end up using more than one in parallel.

1. File a CIT Complaint of Your Own

The CIT’s May 7 ruling applied only to the named plaintiffs. If the Federal Circuit affirms but does not grant nationwide relief, importers who never filed a complaint may have no judicial basis for refunds even though a court has held the underlying tariff unlawful.

Filing a CIT complaint puts you in scope of:

• Any future favorable appellate ruling that grants relief to plaintiffs.
• Any settlement or class-style framework that the courts or DOJ may eventually extend to litigants.

The cost of filing is meaningful but generally far less than the duties at stake for any importer with five-figure-monthly Section 122 exposure or larger. Trade counsel can advise on whether filing a stand-alone complaint, joining an existing action as an additional plaintiff, or coordinating through an industry coalition is the most efficient route for your facts.

2. File Protective Protests Under 19 USC § 1514

The 180-day protest clock runs from each entry’s date of liquidation, independent of any CIT ruling. If you wait for the Federal Circuit to decide the appeal before filing protests, the protest window will already have closed on the earliest-liquidated entries.

A protective protest:

• Preserves your administrative refund right at the entry-by-entry level.
• Costs little to file relative to a CIT complaint.
• Sits in CBP’s queue and can be granted, denied, or extended depending on how the legal posture evolves.

For most importers, filing protests on every Section 122 entry as it liquidates is the cheapest insurance available. Combine with a tracker so you do not miss a deadline as entries roll through liquidation.

3. Wait for an Administrative Mechanism (Lowest Confidence)

If the Federal Circuit affirms the CIT and orders broader relief, CBP would need to build some kind of refund process. There is no guarantee that process would look anything like CAPE — it could just be enhanced protest processing, a one-time refund batch tied to specific HTS lines, or a litigation-driven settlement.

This path has the lowest cost (no filing fee, no counsel time) but the highest risk. If the appellate court sides with the government, or grants relief only to the named plaintiffs, importers who pursued only path 3 will recover nothing. Treat this path as a fallback, not a primary strategy.

What to Do This Week

A short, ranked checklist for any U.S. importer that paid Section 122 duties:

1. Quantify exposure. Pull every affected entry summary from February 24 through July 24, 2026 and isolate the Section 122 HTS line. Total the duty paid by month — that is your potential refund universe.
2. Calendar your protest deadlines. For every entry that has liquidated, log the 180-day deadline under 19 USC § 1514. Set internal alerts at 30 days out.
3. Consult trade counsel on a CIT filing. If your monthly exposure is meaningful (five figures or more), evaluate whether to file a stand-alone complaint, join an existing action, or coordinate through an industry coalition.
4. Keep CAPE on its own track. None of this affects your IEEPA refund posture. Continue working through CAPE Phase 1 declarations on the IEEPA side; they share no procedural mechanics with Section 122 recovery.
5. Document, document, document. Entry date, payment date, HTS line, surcharge amount, liquidation date. The same data you preserved for IEEPA recovery is exactly what you will need if a Section 122 refund mechanism emerges.

Watch List

Update — July 28, 2026: Section 122 Collection Ends as New Section 301 Duties Begin

• The Section 122 collection period ended on July 24. Proclamation 11012 provided that the 10% surcharge would continue through 12:01 a.m. eastern daylight time on July 24, 2026 unless Congress extended it. No such extension has been verified. Source: White House, Proclamation 11012.
• The expiration does not automatically refund earlier Section 122 payments. Importers should continue tracking liquidation dates and filing protective protests within 180 days where appropriate while the Federal Circuit appeal remains pending.
• A separate Section 301 regime took effect on July 24. USTR imposed new forced-labor-related Section 301 duties on goods from 60 economies, with CBP filing instructions in CSMS #69326983. These are not Section 122 or IEEPA duties and are not refundable through CAPE. Sources: USTR/White House Section 301 action and CBP CSMS #69326983.

Where to Get Help

Section 122 strategy is fact-specific and timing-sensitive. If you have material exposure to the 10% surcharge and want a coordinated plan across protests, CIT filings, and CAPE on the IEEPA side, our free assessment routes you to vetted trade law professionals who handle multi-channel refund recovery.

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This post summarizes public Court of International Trade and Federal Circuit rulings and official tariff actions reviewed through July 28, 2026. We are not a law firm and this is not legal advice. For decisions affecting specific entries, consult a licensed customs broker or trade attorney.