The Court of International Trade voided Trump's Section 122 universal tariff in a 2-1 ruling; the Federal Circuit stayed the order pending appeal, with a July 24 expiration looming.
A divided panel of the U.S. Court of International Trade struck down President Trump's 10% universal import tariff imposed under Section 122 of the Trade Act of 1974, holding that the economic conditions the administration cited did not constitute the "balance-of-payments deficits" Congress contemplated when it enacted the statute [1]. The panel split 2-1 and entered a permanent injunction, though the court limited relief to the three named plaintiffs rather than issuing a broader nationwide order [2]. The ruling came the same day the Supreme Court invalidated the administration's separate tariffs imposed under the International Emergency Economic Powers Act [1].
The case, styled as Oregon v. United States and consolidated with Burlap and Barrel v. United States, was heard before a three-judge panel of the Court of International Trade in New York, with Chief Judge Mark Barnett presiding [1]. The government appealed immediately to the U.S. Court of Appeals for the Federal Circuit, which granted an administrative stay of the injunction on May 12, allowing the tariffs to remain in effect while the appellate court considers the matter [2]. The Department of Justice and the U.S. Trade Representative are coordinating the government's defense of the tariff program [1].
The ruling is the second successive judicial rejection of the administration's claimed tariff authorities in a compressed period, following the Supreme Court's IEEPA decision [2]. The court's statutory analysis is significant because Section 122 was designed as a narrow, temporary tool to address specific balance-of-payments crises, and the panel found that the administration's characterization of prevailing trade conditions did not satisfy that threshold [1]. The dissent, however, signaled that at least one judge read Congress's intent more broadly, a fault line that the Federal Circuit and, potentially, the Supreme Court will have to resolve [2].
Importers face a narrow and time-sensitive window for practical action. The Section 122 tariffs are set to expire by their own terms on July 24, 2026, which means the litigation timeline and any relief from it will likely converge near that date [1]. Trade counsel have advised importers to evaluate their rights to file protests and seek duty refunds before that deadline, because the stay does not eliminate the legal basis for those claims if the injunction is ultimately upheld on appeal [2]. Whether the Federal Circuit will expedite briefing, given the July expiration, remains an open question.