A trade court struck down Trump's Section 122 global tariff, but a Federal Circuit stay quickly suspended the win, leaving importers still paying duties pending appeal.
A divided panel of the U.S. Court of International Trade struck down President Trump's 10% across-the-board tariff imposed under Section 122 of the Trade Act of 1974, holding that the statutory conditions for invoking a balance-of-payments emergency had not been satisfied [1]. The May 7 ruling, decided 2-1, granted a permanent injunction blocking enforcement of the tariff, but only as to the three prevailing plaintiffs: two importers and the State of Washington [2]. The court declined to issue a universal injunction that would have suspended the tariff across the broader import economy [3].
The consolidated cases, captioned Oregon v. Trump and Burlap & Barrel v. Trump, were brought before the Court of International Trade, a specialized Article III tribunal in New York with exclusive jurisdiction over federal trade statutes [1]. The plaintiffs argued that Section 122, which authorizes temporary tariff measures to address a balance-of-payments crisis, did not permit the administration to invoke emergency powers absent a qualifying economic condition. The court's majority agreed, finding the administration's factual predicate for the tariff legally insufficient [2]. The government appealed immediately, and on May 12 the U.S. Court of Appeals for the Federal Circuit issued an administrative stay, suspending the limited injunction while the appeal proceeds [3].
The practical consequence of the Federal Circuit's stay is significant: even the three winning plaintiffs must continue paying the 10% duty pending appellate review [2]. For the broader importer community, the tariff remains fully operative. The ruling is the second successive judicial invalidation of a Trump tariff authority, following a separate court's rejection of tariffs imposed under the International Emergency Economic Powers Act [3]. Together, the decisions suggest a consistent pattern of federal courts scrutinizing, and limiting, the statutory predicates underlying executive trade action.
The Section 122 tariff carries a statutory expiration date of July 24, 2026, absent congressional extension [1]. That deadline compresses the Federal Circuit's effective review window. If the appellate court does not resolve the stay motion and the merits on an expedited schedule, the tariff may lapse before a final judgment issues, potentially mooting the appeal in part [2]. Counsel for importers have advised clients to continue duty payments while monitoring the Federal Circuit docket for briefing schedules and any modification of the administrative stay [3].