U.S. Trade Court: 10% import surcharge under Section 122 is unlawful

The U.S. Court of International Trade (CIT) on May 7, 2026, issued an opinion and order invalidating Proclamation 11012, which had imposed a temporary 10% ad valorem surcharge on all articles imported into the United States, with certain exceptions, effective February 24, 2026. The court found that the president exceeded the authority delegated by Congress under Section 122 of the Trade Act of 1974.

Proclamation 11012 was based on the president’s finding of a "large and serious United States balance-of-payments deficit." However, the CIT determined that the term "balance-of-payments deficits" in Section 122 referred to specific economic measures of that time—namely, deficits in liquidity, official settlements, or basic balance. The court found that the proclamation improperly relied on different, more modern metrics such as the "current account deficit" and "trade deficit," which were not the measures Congress intended to empower presidential action when the law was written.

Because the proclamation did not identify a deficit based on the standards contemplated by the statute, the court held that the president acted beyond his statutory authority, rendering the proclamation and the tariffs invalid.

The court granted a permanent injunction for the specific plaintiffs—two businesses and Washington State—that were direct importers of goods, preventing the U.S. government from collecting the 10% surcharge from them and ordering a refund of any duties already paid. The court dismissed the claims from other non-importer plaintiffs for lack of standing and declined to issue a universal injunction that would have applied to all importers.

The case is: The State of Oregon v. United States, Court No. 26-01472 (Ct. Int’l Trade, May 7, 2026). Read the CIT’s opinion and order