Importers are now in an unusual and expensive position. On 11 June 2026, the US Court of Appeals for the Federal Circuit stayed a lower court ruling that had struck down the Section 122 tariffs, which means the government can continue collecting the surcharge on most imports while it appeals. The surcharge was introduced at 10% under the original proclamation and later raised to a reported 15%, the statutory maximum. The court went further than a routine stay, stating that the government is likely to succeed in overturning the decision. For any business importing into the United States, this changes the calculation on cost, cash flow, and the refunds that may, or may not, eventually arrive.
This is a fast-moving legal situation with a hard deadline attached, and the practical steps an importer takes now will determine whether they are positioned to recover these duties later. This blog explains what just happened, why the tariffs are still being collected despite being ruled unlawful, what the 24 July expiry means, and the specific actions importers should take to protect their position.
The Section 122 tariffs are a surcharge on most US imports, introduced at 10% in February 2026 and later raised to a reported 15%. A trade court ruled the surcharge unlawful in May, but on 11 June 2026 the Federal Circuit stayed that ruling pending appeal, so collection continues. They are scheduled to expire on 24 July 2026 unless extended.
| Status | Before 11 June | Now (after the stay) |
|---|---|---|
| Legal standing | Trade court had ruled the surcharge unlawful | Ruling paused; appeal court says government likely to win |
| Do you still pay? | Yes, except for the named plaintiffs | Yes, all importers, collection continues at the current rate |
| Refund prospect | Possible if ruling stood | Depends on the appeal outcome; preserve rights now |
| Expiry | 24 July 2026 unless extended | 24 July 2026 unless extended; Section 301 may replace it |
What Just Happened With the Section 122 Tariffs
To follow why importers are paying a duty a court called unlawful, it helps to see the sequence, because this has moved quickly.
- February 2026: After the Supreme Court invalidated the previous tariff basis, the administration introduced a surcharge on most imports under Section 122 of the Trade Act of 1974, effective 24 February 2026, at an initial 10% rate later raised to a reported 15%
- 7 May 2026: The US Court of International Trade ruled, in a divided decision, that the Section 122 tariffs were unlawful, finding the statutory conditions to impose them were not met. The injunction applied only to the named plaintiffs, so most importers kept paying
- 8 May 2026: The government appealed to the Federal Circuit and sought to keep the tariffs in place during the appeal
- 11 June 2026: The Federal Circuit granted a stay pending appeal, finding the government is likely to succeed on the merits. The tariffs continue to be collected from all importers while the appeal proceeds
The result is a strange status quo. A lower court has said the tariff is unlawful, but a higher court has paused that ruling and signalled it may well be reversed, so collection continues. For importers, the legal argument is less important than the cash position: the surcharge is still being charged on entries today, and there is no automatic refund on the horizon. This follows the same pattern as the earlier tariff litigation we covered in our analysis of how the Supreme Court struck down the IEEPA tariffs, which is what led the administration to Section 122 in the first place.
Why You Are Still Paying a Tariff Ruled Unlawful
The reason comes down to how a stay works. When the trade court ruled the surcharge unlawful, that ruling only directly protected the specific companies that brought the case. Every other importer remained liable. When the government appealed and asked the Federal Circuit to pause the ruling, the appeals court agreed, which means the lower court’s decision has no force while the appeal is heard. In practical terms, the legal status of the tariff is unsettled, but the obligation to pay it is not. Customs continues to assess and collect the surcharge on affected entries at the current rate.
This matters for cash flow planning. An importer cannot simply stop paying on the basis that a court called the tariff unlawful, because the stay keeps the collection in force. What an importer can do is make sure that if the appeal ultimately fails and refunds become available, they are positioned to claim. That requires action now, not later. For background on how the surcharge itself operates, see our explainer on the Section 122 tariff and what importers need to know.
The 24 July Expiry and What Comes After
There is a second deadline running alongside the appeal. Section 122 is a temporary balance-of-payments authority. The statute permits a surcharge of up to 15%, the maximum the current rate reaches, for no more than 150 days unless Congress extends it. That 150-day window means the current surcharge is scheduled to expire on 24 July 2026 absent congressional action.
The expiry does not mean tariff relief is coming, though. The administration has signalled that it intends to replace the expiring Section 122 surcharge with country-specific tariffs under Section 301, and the US Trade Representative has investigations already underway timed to take effect before the Section 122 window closes. In other words, importers should not plan on a return to pre-surcharge costs in late July. The mechanism may change from a broad Section 122 surcharge to targeted Section 301 duties, but the direction of travel on import costs is not easing. We cover the replacement track in our analysis of the Section 301 tariffs for 2026.
Paying the Section 122 surcharge and unsure how to protect your position? Carra Globe’s Importer of Record services help importers keep accurate entry records, model duty exposure, and stay ready to act as the legal picture changes.
Section 122 Tariffs: What Importers Should Do Now
The importers who come out of this best are the ones who treat the unsettled legal status as a reason to prepare, not a reason to wait. The appeal could take many months, and if it fails, the ability to claim a refund will depend on the records and deadlines you preserve during this period. Take these steps now.
- Preserve every Section 122 entry record. Organise and retain the documentation for all entries on which you have paid the Section 122 surcharge. If refunds become available after the appeal, your claim will depend on clean, complete entry records. This is the single most important step
- Track your protest and post-summary correction deadlines. Refund rights run on strict timelines tied to when each entry liquidates. A post-summary correction can be filed before liquidation, and a protest is generally filed within 180 days after liquidation. Diarise the liquidation date of every Section 122 entry so neither window closes unnoticed, and consider filing protective claims to keep your rights open while the appeal runs
- Quantify your Section 122 exposure. Calculate how much you have paid and continue to pay in Section 122 duties at the applicable rate, so you know the size of the potential refund at stake and can make an informed decision about whether to file protective claims. Our landed cost guide helps you model the duty component accurately
- Plan for the post-24 July landscape. Do not assume costs drop when Section 122 expires. Model the likely Section 301 replacement on your specific product lines and origins, so the transition does not catch you unprepared
- Get your import structure and classification right. Accurate classification and a compliant import of record structure protect you through a period of legal flux and tighter enforcement. For the foundational role, see our explainer on what an Importer of Record is and does
This situation also sits within a broader tightening of US customs enforcement in 2026, which raises the stakes on getting documentation and import structure right. For the wider context, see our analysis of the 2026 customs enforcement changes affecting every importer of record.
Frequently Asked Questions
Are Section 122 tariffs still in effect in 2026?
Yes. Although the US Court of International Trade ruled the Section 122 tariffs unlawful in May 2026, the Federal Circuit stayed that ruling on 11 June 2026 pending appeal. The surcharge, introduced at 10% and later raised to a reported 15%, continues to be collected on most US imports while the appeal proceeds, and is scheduled to expire on 24 July 2026 unless extended.
Importers cannot stop paying the surcharge on the basis of the lower court ruling, because the stay keeps collection in force. The duty remains payable on affected entries until either the appeal concludes or the tariffs expire.
Can I get a refund on Section 122 tariffs I have paid?
Possibly, but not automatically and not yet. If the appeal ultimately upholds the ruling that the tariffs are unlawful, refund opportunities may become available to importers beyond the original plaintiffs. To preserve that possibility, you must keep complete entry records and track the protest and post-summary correction deadlines tied to your entries now.
Refunds depend on the outcome of the appeal and on having preserved your rights through proper documentation and timely filings. Importers who wait until a refund is confirmed before organising their records risk missing the deadlines that make a claim possible.
What happens when the Section 122 tariffs expire on 24 July 2026?
The Section 122 surcharge is scheduled to expire on 24 July 2026 unless Congress extends it, but importers should not expect costs to return to pre-surcharge levels. The administration intends to replace it with country-specific Section 301 tariffs, with investigations already underway timed to take effect before the Section 122 window closes.
The likely shift is from a broad Section 122 surcharge to targeted Section 301 duties on specific countries and products. Importers should model the potential Section 301 impact on their own product lines rather than planning for relief in late July.
Why are importers still paying a tariff a court ruled unlawful?
Because the Federal Circuit stayed the lower court ruling pending appeal. A stay pauses the effect of a ruling, so the surcharge remains collectable while the higher court reviews the case, and the appeal court has signalled the government is likely to win.
The lower court’s injunction also only ever protected the three named plaintiffs in the original case. Every other importer was liable throughout, and remains liable now that the stay is in place.
The Section 122 appeal will likely take months, and its outcome is uncertain. The importers who handle it well are simply the ones who keep clean records, track their liquidation deadlines, and plan for the post-July landscape now rather than reacting later. If you would like support reviewing your Section 122 exposure or keeping your entry records claim-ready, Carra Globe acts as importer of record across more than 175+ countries and can help you put that in place.