US Trade Court Strikes Down Trump's 10% Global Tariff

The U.S. Court of International Trade ruled on Thursday that former President Donald Trump unlawfully imposed a 10% global import tariff under Section 122 of the Trade Act of 1974, marking another major judicial setback to Trump-era tariff measures.

The decision, issued by a three-judge panel of the court, found in a 2-1 ruling that the administration failed to demonstrate the kind of 'large and serious' balance-of-payments emergency required under Section 122, and that the president exceeded statutory authority in imposing the tariff.

The ruling came less than three months after the U.S. Supreme Court invalidated Trump's sweeping 'reciprocal tariffs' and 'fentanyl tariffs,' which had been imposed under the International Emergency Economic Powers Act (IEEPA).

Following that Supreme Court ruling on Feb. 20, 2026, the Trump administration moved quickly to preserve tariff measures by invoking Section 122 as an alternative legal mechanism. The 10% global tariff took effect around Feb. 24 and was designed to remain in force for up to 150 days unless extended by Congress.

Court Orders Refunds With Interest

The court sided with plaintiffs that included small businesses such as Burlap & Barrel, Basic Fun, and the state of Washington.

Judges ordered the government to refund tariffs already paid by the plaintiffs, together with interest, and issued a permanent injunction preventing the tariffs from being collected from those parties.

However, the ruling was narrowly tailored and did not fully block nationwide enforcement of the Section 122 tariffs. Instead, it applies specifically to the plaintiffs involved in the case — two private importers and Washington state.

Trade lawyers said the decision nonetheless opens the door for other companies that paid Section 122 tariffs to file lawsuits seeking refunds. If the Trump administration declines to appeal, refunds could proceed directly. Even if appealed, many analysts expect the outcome to mirror the earlier IEEPA tariff cases, ultimately resulting in reimbursement of duties already collected.

As a result, legal experts said the Section 122 tariff regime has become effectively unenforceable in practice, particularly given the likelihood of widespread refund claims.

Appeal Expected as Tariff Expiry Nears

The Trump administration is widely expected to immediately appeal the decision to the U.S. Court of Appeals for the Federal Circuit (CAFC), the standard appellate court for Court of International Trade cases.

The CAFC is known for handling trade disputes on an expedited basis, especially in high-profile tariff litigation.

Yet the Section 122 tariff itself faces a limited lifespan. Under the statute, the measure can remain in effect for no more than 150 days unless Congress explicitly authorizes an extension, meaning the tariff is currently scheduled to expire on July 24, 2026.

Even if appellate proceedings continue, the tariff could expire before the U.S. Supreme Court reaches a final ruling, or be replaced by alternative trade measures such as Section 301 tariffs.

U.S. Accelerates Section 301 Investigations

At the same time, the Trump administration has intensified efforts to deploy Section 301 of the Trade Act as a replacement for the invalidated IEEPA tariff framework.

In March 2026, the Office of the United States Trade Representative (USTR) launched two major Section 301 investigations covering more than 60 key trading partners representing over 99% of U.S. imports, including China, the European Union, Mexico, India, and Japan.

One investigation focuses on alleged 'structural excess capacity' in manufacturing sectors across 16 economies. Another targets countries accused of failing to effectively prohibit imports linked to forced labor, covering roughly 60 economies.

The investigations cite unfair trade practices and allegedly 'unreasonable or discriminatory' policies, meeting statutory requirements under Section 301. Public hearings have already been held, and the USTR is reportedly seeking to accelerate the process so that new tariff measures could be finalized before the Section 122 tariffs expire in late July.

Refunds for 'Reciprocal' and 'Fentanyl' Tariffs Expected Around May 11

Separately, refunds tied to Trump's IEEPA-based tariffs — including the so-called 'reciprocal tariffs' and 'fentanyl tariffs' — have entered the implementation phase.

The refunds, which include both principal and interest, are being processed by U.S. Customs and Border Protection (CBP).

On April 20, 2026, CBP officially launched the CAPE refund system, allowing importers and authorized customs brokers to submit refund claims through the ACE portal. The system serves as a dedicated channel for large-scale processing of IEEPA tariff reimbursements.

According to the current processing schedule, the first wave of refunds could begin reaching importers around May 11.