Section 122 Tariffs Hold: Inside the Federal Circuit’s Stay and What It Means for Importers

Executive Summary 

On June 11, 2026, the Federal Circuit paused the ruling that struck down the 10% Section 122 tariff, granting the government’s request for a stay while the appeal plays out. For importers, that means the duty keeps getting collected, and your compliance obligations have not changed. With a July 24 expiration on the calendar and Section 301 and 232 waiting in the wings, the smart move now is preparation, not waiting for the next court headline.

Intro  

If you penciled a Section 122 refund into your summer cash-flow forecast, the Federal Circuit just moved your timeline. On June 11, the court hit pause on a lower court decision that declared the 10% global tariff unlawful, while the duty is still being collected at the border.

This is familiar ground for importers who spent the past year watching tariff authority bounce between the White House and the courts. We have followed this one since the pivot from IEEPA to Section 122, and the latest order is another sign that uncertainty, not relief, is the steady state.

What follows is what the stay does, what it doesn’t, and the moves worth making before the next decision lands.

What the Federal Circuit Actually Decided on June 11

On June 11, the U.S. Court of Appeals for the Federal Circuit granted the government’s motion to stay enforcement of the Court of International Trade’s injunction. Customs keeps collecting the 10% surcharge while the appeal moves forward.

The reasoning behind the decision is what importers should sit with. The court applied the standard four-factor test and found the government likely to win on the merits. It also signaled that the trade court’s narrow reading of Section 122 may be wrong, and pointed to the trade disruption and refund headaches a freeze would create.

What’s more, the order flipped the practical picture from May, when the trade court had refused to pause its own ruling. 

For now, the takeaway at the dock is that nothing changes, and the duty is still due.

How a Dormant 1974 Law Became a 10% Tariff

That duty did not appear out of nowhere, and its backstory is why the stay carries weight. In February, the Supreme Court struck down the administration’s IEEPA tariffs, and the White House needed another way to keep pressure on.

It landed on Section 122 of the Trade Act of 1974, a balance-of-payments tool no president had touched since it became law. The authority is real but short by design: a surcharge of up to 15%, capped at 150 days.

Proclamation 11012 used that window to put 10% on nearly everything starting February 24, with a fresh Chapter 99 line and matching CBP guidance.

Then the courts weighed in. On May 7, a divided trade court ruled 2-to-1 that the proclamation overstepped the statute. Relief, though, reached only the companies that sued, so working with a licensed broker and paying the 10% stayed the reality for everyone else.

What the Stay Changes at Your Border Right Now

At the entry level, the answer is short: nothing. The 10% surcharge is still owed on covered imports; you still report 9903.03.01, and the appeal does not buy you a pause on payment.

This is not abstract. Importers have already paid roughly $25 billion in Section 122 duties since late February, and that meter keeps running while the case is argued.  

It’s also the worst possible time to get loose with the details. Skipping the surcharge or fudging a classification to bet on the appeal invites penalties and interest, not savings.

The cleaner move is to keep your classification and entry work tight right now, because accurate entries today are what make a refund possible later.

Refunds Are Possible, But They Will Not Be Automatic

The upside is real and worth planning around. If the appeal goes the importers’ way and the ruling stands, refunds of Section 122 duties could open up for companies beyond the original plaintiffs.  

What it won’t be is automatic. The IEEPA refund rollout already taught this lesson: claims run through CAPE inside the ACE portal, refunds consolidate by importer of record and liquidation date, and your banking details have to be set up correctly or the money stalls.

So the companies that move first when a window opens are the ones who did the unglamorous work early. Clean entry data, correct HTS reporting, and refund routing in place beat watching the docket.

Our refund-readiness guidance walks through the prep, and it is worth a look now rather than later.

What Comes After July 24

Even with the stay, the Section 122 surcharge is built to expire on July 24 unless Congress extends it. Relief, though, is not the same as the tariff simply vanishing.

The administration has other tools loaded. Two USTR investigations under Section 301, one on forced labor and one on manufacturing overcapacity, are timed to wrap before the 122 clock runs out.  

Section 232 sits in reserve as another path, and the sector tariffs already in place under Sections 232, 201, and 301 are untouched by this case.  

Meanwhile, the appeal grinds on at the Federal Circuit, possibly en banc, with the Supreme Court a real possibility after that. The practical lesson is to plan for a range of outcomes, not a single one, and to build flexibility into your ocean and air routing before you need it.

Steady Footing When the Rules Keep Moving

Section 122 isn’t settled, and that’s what makes it difficult. The next ruling could change refund strategy, landed cost, sourcing, or routing before importers have every answer they want. Freight won’t pause while the legal process catches up. Orders still need to move, inventory still needs a plan, and customers still expect delivery.

Mallory Alexander was built for that kind of uncertainty. Since 1925, we’ve helped importers keep their footing when trade rules change around them. Our customs brokerage team helps keep entries clean and compliant, our trade-compliance team helps you understand exposure and preserve refund rights, and our myMALLORY platform gives you real-time visibility. All while our forwarding, warehousing, and distribution teams help turn that visibility into practical next steps.

The court schedule is out of your hands. Readiness isn’t. If Section 122 changes the cost picture again, you’ll want a partner who already knows your freight, your filings, and your options.

So, talk to us. We’d be happy to take a quick review of your Section 122 exposure, refund readiness, and sourcing plan.