Federal Appeals Court Allows 10% Section 122 Tariff Collection to Continue
The U.S. Court of Appeals for the Federal Circuit issued a significant ruling on June 11, allowing the federal government to continue collecting the 10% Section 122 tariffs while legal challenges against the measure move forward.
The decision temporarily reverses a lower court injunction that would have halted collection of the tariffs, siding with the Trump administration’s request to keep the duties in place during ongoing litigation. The case was brought by a coalition of U.S. states and small businesses challenging the legality of the tariff authority.
In its opinion, the appeals court concluded that the federal government had plausibly demonstrated that suspending tariff collection could result in irreparable harm, particularly due to the difficulty of recovering unpaid duties if the government ultimately prevails. The court also noted that importers would face limited prejudice from the continued collection of the tariffs because, if the measure is eventually ruled unlawful, refunds with applicable interest could be issued.
Background on the Section 122 Tariffs
The Section 122 tariffs were imposed in February following legal developments surrounding the administration’s previous reliance on the International Emergency Economic Powers Act (IEEPA). As a temporary trade measure, the tariffs established a 10% duty on covered imports and are currently scheduled to expire on July 24, 2026, unless extended or replaced by additional government action.
Because the litigation remains unresolved, the appeals court’s decision does not determine whether the tariffs are ultimately lawful. Instead, it allows the government to continue enforcing and collecting the duties while the case proceeds through the judicial process.
What This Means for Importers
For businesses involved in international trade, the practical impact is straightforward: the 10% Section 122 tariff remains in effect for now.
Importers should continue:
- Accounting for the additional 10% duty in cost calculations and landed pricing.
- Monitoring cash flow impacts resulting from tariff payments.
- Reviewing customs entries and maintaining documentation in case future refund opportunities become available.
- Staying informed on legal and regulatory developments that could affect duty obligations before the July 24 expiration date.
While the possibility of refunds exists if the tariffs are ultimately invalidated, companies should not assume relief is guaranteed and should continue operating under current Customs requirements.
Looking Ahead
The legal battle over the Section 122 tariffs is expected to continue, and future court decisions or administrative actions could significantly alter the trade landscape. Importers should remain vigilant, as additional rulings may affect both the duration of the tariffs and the availability of potential refunds.
Radius Logistics will continue monitoring developments and providing updates as new information becomes available. Our team works closely with clients to navigate evolving tariff regulations, assess duty exposure, and develop strategies to minimize disruptions in an increasingly complex global trade environment.
If your business has questions about the Section 122 tariffs or needs assistance managing customs compliance and import costs, contact Radius Logistics to discuss your supply chain needs with our trade experts.
