On May 7, 2026, the Court of International Trade held that President Trump unlawfully invoked Section 122 of the Trade Act of 1974 to impose the 10% global tariff meant to replace the IEEPA tariffs the Supreme Court struck down in February. A two-judge majority (Judges Barnett and Kelly) concluded that the conditions for a Section 122 tariff were not met, finding that the statute's legislative history shows Congress understood balance-of-payments deficits to mean deficits in liquidity, official settlements, or basic balance — not the trade, income, and current-account figures the administration cited. The court warned that allowing the President to pick among sub-accounts to declare a deficit would raise non-delegation and constitutional concerns.
The majority also held that 23 of the 24 challenging states lacked standing because they did not directly import affected goods, dismissing their claims as resting on speculative injury. As a remedy, the court issued a permanent injunction limited to the parties with standing — the private importers Burlap and Barrel and Basic Fun, plus the state of Washington in its capacity as an importer — and ordered refunds, with interest, of Section 122 duties they paid. The court declined to issue universal relief, citing Trump v. CASA.
Judge Stanceu dissented, arguing the statute does not limit balance-of-payments to those three measures and that the legislative history does not support the majority's reading. He also objected to the majority granting summary judgment on its own initiative without giving the government adequate notice and time to respond.