Section 122 Ruling Outcomes After the May 7 CIT Decision

Informational only - not legal advice.

What changed since this page was first published

This page originally mapped possible outcomes after the April 10, 2026 oral argument. The CIT issued its decision on May 7, 2026, so the scenario analysis is now an outcomes guide.

The outcome in one table

Why the court invalidated Proclamation No. 11012

Section 122 authorizes temporary import surcharges to address large and serious U.S. balance-of-payments deficits. The court held that Congress used that phrase in a specific 1974 sense tied to liquidity, official settlements, and basic balance measures.

The proclamation instead relied on trade deficits, current-account deficits, primary and secondary income balances, and net international investment position. The majority accepted the proclamation's factual statements for purposes of the ruling but held those facts did not identify a qualifying Section 122 balance-of-payments deficit.

That distinction matters for content and product copy:

• A trade deficit is not automatically a Section 122 balance-of-payments deficit.
• Current-account data did not substitute for the specific statutory meaning the majority found in the 1974 record.
• The court did not need to decide every alternate attack on the proclamation because this holding was enough to invalidate it.

Who gets relief now

The judgment's direct relief goes to importer plaintiffs:

• The State of Washington and its instrumentalities
• Burlap and Barrel, Inc.
• Basic Fun, Inc.

The court found those plaintiffs had standing because they directly imported goods subject to Section 122 duties. The remaining state plaintiffs alleged more indirect purchaser or state-economy harms, and the court dismissed their claims for lack of standing.

What importers outside the judgment should not assume

Do not assume:

• every 9903.03.* entry is automatically refunded
• CAPE will accept Section 122 refund declarations
• CBP has stopped Section 122 collections for all entries
• the government will not seek a stay or appeal
• a buyer that paid the economic cost has the same procedural rights as the IOR

Do assume your records matter. If broader relief or CBP guidance follows, the importers who can act fastest will be the ones with entry numbers, IOR identity, liquidation status, and Section 122 duty amounts already organized.

CAPE is still IEEPA-only

CAPE was built for IEEPA refunds after the Supreme Court's IEEPA ruling. CBP's CAPE notice describes removing IEEPA HTS numbers and recalculating entries without IEEPA duties. The Section 122 family is different: 9903.03.01 through 9903.03.11.

That means a clean refund analysis should now have at least two separate lanes:

1. IEEPA/CAPE lane: historical IEEPA duties, CAPE Phase 1 eligibility, liquidation status, ACH routing.
2. Section 122 ruling lane: 9903.03.* entries, named-plaintiff judgment, possible stay/appeal, and future CBP guidance.

Universal injunction context

The court's decision to decline a universal injunction is anchored in the Supreme Court's 2025 decision in Trump v. CASA, Inc., 606 U.S. 831 (2025), which left it an open question whether the CIT may issue universal injunctive relief at all. Slip Op. 26-47 reasoned the question did not need to be reached here because the indirect harms alleged by the dismissed state plaintiffs would not justify universal relief in any event.

What to watch next

Posture as of May 8, 2026: No government stay request or notice of appeal docketed at CIT or CAFC in the reviewed source set.

• Emergency stay request or appeal. A stay could affect whether and how quickly the injunction changes operations.
• CBP guidance. The judgment requires implementation within five days for importer plaintiffs; CBP may issue CSMS guidance.
• Broader importer remedies. Non-party importers may need separate protests, PSCs, actions, or later guidance.
• HTS/ACE treatment. Watch whether CBP changes filing behavior for 9903.03.* headings.