The Daily Fuckup

The Section 122 tariff dispute is still alive, but the reason the duties remain in place is procedural, not substantive. On May 7, 2026, the U.S. Court of International Trade ruled that the temporary import surcharge imposed under Section 122 of the Trade Act of 1974 was unlawful and entered a permanent injunction for the successful plaintiffs. The court also said importer plaintiffs could recover Section 122 duties paid before the injunction took effect, with interest as provided by law.

The government appealed the next day. On May 12, the Federal Circuit granted an immediate administrative stay, temporarily pausing enforcement of the judgment and the injunction while it considered a fuller stay request. Then, on May 20, the trade court denied the government’s motion for a stay pending appeal. The result is that the tariff collection continues for now because the appellate stay is in place, not because the merits have been decided for the government.

That distinction matters for anyone importing goods or setting prices around them. As long as the stay remains active, customs can keep collecting the duty. If the plaintiffs ultimately prevail on appeal, the government loses the legal basis for continuing the surcharge, and the refund question shifts from a court fight to an administrative cleanup.

The case stems from Proclamation No. 11012, issued Feb. 20, 2026, which described the surcharge as a response to fundamental international payments problems. The trade court rejected that move. It found the proclamation unlawful, limited relief to the plaintiffs who had standing, and declined to turn the ruling into a universal injunction. For the businesses directly covered by the judgment, that means the tariff was struck down on the merits even though the collection of duties has not stopped yet.

So the bottom line is simple: the Section 122 duties are still being collected, but only because an appellate stay is holding the judgment in place while the case moves forward. The trade court has already ruled against the tariff. The appeal will decide whether that ruling starts changing what importers actually pay.