The U.S. Court of International Trade has ruled U.S. President Donald Trump’s use of Section 122 to enact a 10 percent tariff across all nations is illegal, though collection of duties will continue for most states and businesses.
Trump announced in February that he planned to impose the 10 percent tariff using Section 122 after the U.S. Supreme Court invalidated his previous sweeping tariff action. Trump had previously justified tariffs on almost every country in the world, announced on his “Liberation Day” in 2025, using the International Emergency Economic Power Act (IEEPA), and after that was ruled out by the court, he switched tactics to Section 122 of the Trade Act of 1974.
That act allows for tariffs of up to 10 percent over and above normal tariffs already being charged and was established as a means of imposing duties on countries related to “large and serious” balance of payment issues.
A three-judge panel on the U.S. Court of International Trade has concluded that Trump’s use of Section 122 was also unlawful. However it only barred the collection of duties from the U.S. State of Washington and two companies suing over the policy, namely Burlap and Barrel and Basic Fun. Claims from several other states including Oregon, California, New York, Maine, and more were denied due to a lack of standing, meaning a preliminary injunction was not issued and duty collection will continue.
“Today's ruling is more positive news for the small businesses that have been crushed by these illegal taxes,” Dan Anthony, the executive director of We Pay The Tariffs – a group formed to oppose Trump’s tariff action – said following the ruling. “The court should have gone further and blocked collection of these tariffs during any appeal."
According to Anthony, U.S. businesses already paid USD 8 billion (EUR 6.8 billion) in Section 122 tariffs in March of this year, the first month that the tariffs were in full effect.
The Trump administration is still dealing with the fallout of the U.S. Supreme Court ruling, which kicked off a tariff refund process which is still ongoing. U.S. Customs and Border Protection launched the first phase of the refund process on 20 April, calling on businesses to use its “Consolidated Administration and Processing of Entries (CAPE)” tool in its “Automated Commercial Environment Secure Data Portal (ACE Portal)” to begin the process.
As it begins issuing refunds, groups like We Pay the Tariffs estimate the U.S. will need to refund USD 166 billion (EUR 141 billion) in illegally collected duties to businesses. Anthony said the Section 122 tariffs, if the administration continues to apply them despite the court ruling, will end up causing the same issues.
“Small businesses cannot afford a repeat of the IEEPA refund headaches now playing out at CBP,” he said. “The administration should stop trying to impose tariffs under false pretenses and let American small businesses focus on growth instead of more tariff shenanigans."
