Published in The Procurement Lawyer, Volume 62, Number 1, Fall 2026. © 2026 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
The US tariff litigation landslide continues to rumble downhill. On February 20, 2026, the US Supreme Court struck down tariffs imposed by President Trump under the International Emergency Economic Powers Act (IEEPA), holding that IEEPA does not authorize the president to impose tariffs. The administration responded by imposing a 10 percent global tariff under Section 122 of the Trade Act of 1974.
On May 7, 2026, a divided three-judge panel of the US Court of International Trade (CIT) held those Section 122 tariffs unlawful as well, though the ruling is narrow in scope and has been suspended by the US Court of Appeals for the Federal Circuit pending appeal.
This article explains both decisions, the tariff refund options available to importers, and the tariff risk that remains regardless of how the litigation is resolved.
Key Terms Used in This Article
Some of the readers of The Procurement Lawyer may not be familiar with the unique terminology in tariff law. So, we thought it would be helpful to start with a list of some of the key terms used in this article.
- IEEPA (International Emergency Economic Powers Act): Codified at 50 U.S.C. § 1701, this statute grants the president broad authority to regulate international commerce in response to declared national emergencies. The Supreme Court held in February 2026 that IEEPA does not authorize the imposition of tariffs.
- Section 122 (Trade Act of 1974): Codified at 19 U.S.C. § 2132, this statute authorizes the president to impose a temporary tariff of up to 15 percent to address large and serious balance-of-payments deficits between the United States and a foreign country. Any such tariff expires after 150 days unless extended by Congress.
- Section 232 (Trade Expansion Act of 1962): Codified at 19 U.S.C. § 1862, this statute authorizes the president to impose tariffs on imports that threaten US national security, based on a finding by the US Secretary of Commerce.
- Section 301 (Trade Act of 1974): Codified at 19 U.S.C. § 2411, this statute authorizes the Office of the US Trade Representative (USTR) to investigate and respond to unfair foreign trade practices (including by imposing tariffs) when those practices burden or restrict US commerce.
- Section 338 (Tariff Act of 1930): Codified at 19 U.S.C. § 1338, this statute authorizes the president to impose tariffs of up to 50 percent against countries that discriminate against US commerce in ways not equally applied to other nations.
- Liquidation: The process by which US Customs and Border Protection (CBP) makes a final determination of the duties, taxes, and fees owed on an import entry. Liquidation typically occurs 314 days after the date of entry. Once an entry is liquidated, the assessed duty amount becomes legally conclusive.
- Unliquidated entry: An entry for which CBP has not yet made a final duty determination. Importers may seek refunds on unliquidated entries through CBP’s CAPE system.
- Final liquidation: An entry is “finally liquidated” when it has been liquidated and the 180-day protest window has closed without a protest being filed. At that point, the duty amount is no longer subject to administrative challenge and can only be disturbed by a court order.
- Protest: A formal written administrative challenge filed with CBP within 180 days of liquidation, disputing the amount of duties assessed. Filing a timely protest preserves an importer’s legal rights.
- CAPE (Consolidated Administration and Processing of Entries) System: CBP’s automated system for processing IEEPA duty refund claims on unliquidated entries, accessible through CBP’s Automated Commercial Environment (ACE).
- Balance-of-payments deficit: A shortfall in a country’s international accounts, reflecting that the country is paying out more to the rest of the world than it is receiving. Congress defined this term at 19 U.S.C. § 2132 with reference to three specific accounting measures: liquidity balance, official settlements balance, and basic balance.
- Industrial overcapacity: The alleged practice by certain foreign governments (most prominently, China) of subsidizing domestic industries beyond domestic demand, resulting in the export of surplus goods at artificially low prices that undercut US producers.
Read more here.