Why did the Section 122 surcharge fail to replace the IEEPA tariffs?
Section 122 was a temporary fallback, not a durable substitute for the IEEPA program. The original IEEPA tariffs had been expanded globally and then rejected by the trade court, the Federal Circuit, and finally the Supreme Court. Trump imposed a 10% Section 122 surcharge the day of the Supreme Court ruling, but that authority allowed a surcharge for only 150 days. The trade court also struck it down, although an appellate stay kept it in effect temporarily, and it ultimately lapsed on July 24. Importers should therefore distinguish refundable invalid IEEPA duties from charges imposed under other tariff statutes.
Trace the chain
The IEEPA ruling
- 1IEEPA tariffs beginRegulatory
Trump invokes IEEPA for the first tariffs: 10% on China, 25% on Canada and Mexico over fentanyl
Three executive orders signed on February 1, 2025 used the International Emergency Economic Powers Act, a 1977 sanctions statute never before used for tariffs, to impose duties on the three largest U.S. trading partners, citing fentanyl trafficking and migration as a national emergency. The China order took effect February 4; the Canada and Mexico duties were paused for a month and then imposed in March. These trafficking tariffs became one of the two sets of IEEPA duties later struck down.
Federal Register ·
This national emergency requires decisive and immediate action, and I have decided to impose, consistent with law, ad valorem tariffs on articles that are products of the PRC as set forth in this order.
Why it matters here. Using a sanctions statute for tariffs established the legal approach that the administration then expanded to a worldwide and reciprocal program.
IEEPA Tariff Refunds: From the Supreme Court Ruling to the Console Lawsuits
- 2Worldwide tariffs expandRegulatory
Executive Order 14257: a 10% worldwide tariff and higher reciprocal rates on dozens of countries
On what the White House called Liberation Day, Executive Order 14257 declared a national emergency over the $1.2 trillion goods trade deficit and used IEEPA to impose a 10% duty on imports from nearly every country from April 5, with country-specific rates of up to about 50% for around 60 trading partners from April 9. Rates were then repeatedly modified: the higher rates were suspended for 90 days, China's rate was raised to 125% and later cut, and the pause was extended into August. These are the reciprocal tariffs at the centre of the litigation.
Federal Register ·
I have declared a national emergency arising from conditions reflected in large and persistent annual U.S. goods trade deficits, which have grown by over 40 percent in the past 5 years alone, reaching $1.2 trillion in…
Why it matters here. The broadened IEEPA program prompted the importer and state cases in which the trade court ruled the tariffs unlawful.
IEEPA Tariff Refunds: From the Supreme Court Ruling to the Console Lawsuits
- 3Trade court rejects IEEPALegal
Court of International Trade rules the IEEPA tariffs unlawful in V.O.S. Selections and the states' case
A three-judge panel granted summary judgment to five small importers led by V.O.S. Selections, represented by the Liberty Justice Center, and to twelve states led by Oregon, holding that IEEPA's power to regulate importation does not confer unbounded tariff authority and that the trafficking tariffs did not deal with the emergencies declared. The court set aside both sets of tariffs and enjoined them nationwide. The Federal Circuit stayed the judgment the next day while the government appealed.
Court of International Trade ·
The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder.
Why it matters here. The merits ruling put the scope of IEEPA's import authority before the en banc Federal Circuit.
IEEPA Tariff Refunds: From the Supreme Court Ruling to the Console Lawsuits
- 4En banc court affirmsLegal
Federal Circuit, sitting en banc, affirms 7 to 4 that IEEPA does not authorize the tariffs
The full Court of Appeals for the Federal Circuit agreed that IEEPA's grant of authority to regulate imports does not authorize tariffs that are unbounded in scope, amount and duration, while vacating the trade court's nationwide injunction for reconsideration in light of the Supreme Court's CASA decision on universal relief. The court stayed its mandate until October 14 so the government could seek Supreme Court review, and the tariffs stayed in force.
Court of Appeals for the Federal Circuit ·
Because we agree that IEEPA’s grant of presidential authority to “regulate” imports does not authorize the tariffs imposed by the Executive Orders, we affirm.
Why it matters here. The appellate court's statutory holding set up the Supreme Court's final decision on whether IEEPA authorized the tariffs.
IEEPA Tariff Refunds: From the Supreme Court Ruling to the Console Lawsuits
- 5Supreme Court invalidates tariffsLegal
Supreme Court holds 6 to 3 that IEEPA does not authorize the President to impose tariffs
Chief Justice Roberts wrote for the Court in Learning Resources v. Trump: the taxing power belongs to Congress, and when Congress has delegated tariff authority it has done so explicitly and with limits, so IEEPA's words regulate and importation cannot carry a delegation of unbounded tariff power. The Federal Circuit was affirmed and the D.C. district-court case was sent back to be dismissed for lack of jurisdiction. By then CBP had collected roughly $166 billion in IEEPA duties from about 330,000 importers on 53 million entries, all of it now potentially refundable.
Supreme Court of the United States ·
Fulfilling that role, we hold that IEEPA does not authorize the President to impose tariffs.
Why it matters here. The Court's ruling created an immediate gap in the tariff program, so Trump issued a Section 122 surcharge the same day.
IEEPA Tariff Refunds: From the Supreme Court Ruling to the Console Lawsuits
Temporary substitute
- 6Section 122 substituteRegulatory
Same day, Trump imposes a 10% Section 122 surcharge for 150 days to replace the struck-down tariffs
Hours after the ruling Trump signed Proclamation 11012 under Section 122 of the Trade Act of 1974, a balance-of-payments authority that allows an import surcharge of up to 15% for at most 150 days without Congress. The 10% surcharge applied to imports from all countries from February 24 with product exceptions, and by statute expired on July 24, 2026. Trump called the Court's decision extraordinarily anti-American and briefly raised the rate to 15%, drawing a new suit from 24 states.
Federal Register ·
Specifically, my advisors have determined that an import surcharge in the form of ad valorem duties is required to deal with large and serious United States balance-of-payments deficits.
Why it matters here. Because Section 122 authorized the 10% surcharge for 150 days, the replacement was both temporary and subject to its own legal challenge.
IEEPA Tariff Refunds: From the Supreme Court Ruling to the Console Lawsuits
- 7Surcharge struck, then stayedLegal
Trade court strikes down the Section 122 surcharge; Federal Circuit stays the ruling five days later
In Oregon v. United States and Burlap and Barrel v. United States the Court of International Trade held Proclamation 11012 invalid because trade and current-account deficits are not the balance-of-payments deficits Section 122 was written for. Relief was limited to the plaintiffs, the State of Washington, Burlap and Barrel and toymaker Basic Fun, and on May 12 the Federal Circuit issued an administrative stay, so collection of the 10% surcharge continued while the appeal proceeded.
Ward and Smith ·
On May 7, 2026, the U.S. Court of International Trade held that Proclamation 11012, which imposed a temporary 10% import surcharge under Section 122 of the Trade Act of 1974, was invalid because the proclamation did…
Why it matters here. The trade court's ruling undermined the replacement even though the appellate stay kept it operating temporarily, so its statutory end date still mattered.
IEEPA Tariff Refunds: From the Supreme Court Ruling to the Console Lawsuits
- 8Surcharge lapsesRegulatory
Section 122 surcharge lapses after 150 days; Section 301 duties on some 60 economies take its place
The temporary 10% surcharge expired as the statute required, and the same day a Section 301 tariff on goods made with forced labour took effect across about sixty economies, two days after a Section 301 tariff on Brazil. Global Trade Alert calculated that the trade-weighted average U.S. tariff barely moved, from 11.0% to 11.2%, but the structure shifted from a near-uniform surcharge back to country-specific duties, with China's average rising to 27.2%.
Global Trade Alert ·
On 22 July the Section 301 tariff on Brazil entered force; on 24 July the temporary Section 122 surcharge lapsed and a Section 301 tariff on goods made with forced labour took effect across some sixty economies.
Why it matters here. Its required expiration after 150 days confirms why Section 122 could not serve as a lasting replacement for the invalid IEEPA tariffs.
IEEPA Tariff Refunds: From the Supreme Court Ruling to the Console Lawsuits
Timelines in this chain
- IEEPA Tariff Refunds: From the Supreme Court Ruling to the Console Lawsuits
- The US–Canada Trade War: From the Fentanyl Tariffs to Section 338 and Dollar-for-Dollar Retaliation
- The Fed's Rate Path: From the 2024 Cuts to Warsh's First Meetings
- Nintendo Switch 2: From the Successor Tease to a Record Launch, 23 Million Units and the $499.99 Price
- The Road to PlayStation 6: PS5 Pro, Project Amethyst, Two Price Hikes and the Memory Crunch
A chain is written by the editor from entries already published on the timelines above, each of which was read against its source before publication. The chain changes when those entries do. Data and terms.