On May 7, 2026, the United States Court of International Trade (“CIT” or “Court”) invalidated Proclamation No. 11012 in The State of Oregon, et al. v. United States, et al. and Burlap and Barrel, Inc., et al. v. United States, et al., holding that the President exceeded his statutory authority in imposing a temporary 10% ad valorem duty on nearly all imports under Section 122 of the Trade Act of 1974. The Court granted summary judgment and a permanent injunction for specific plaintiffs, concluding that the administration misinterpreted the term “balance of payments deficits,” using modern “current account” metrics rather than the specific economic criteria intended by Congress when the law was enacted in 1975.

While the CIT invalidated the tariffs for three plaintiffs, it dismissed the claims of 23 other states for a lack of standing, finding their alleged economic harms too speculative.  Further, the CIT explicitly declined to issue a universal, nationwide injunction to halt the tariffs for everyone.  Instead, it limited relief exclusively to certain plaintiffs.

Below are additional details regarding the CIT’s opinion and its rationale for ruling the tariffs unlawful.

Standing: Importers vs Non-Importers

The CIT divided the plaintiffs into two distinct groups, granting standing only to those plaintiffs that were directly impacted.

• Private Importer Plaintiffs: The Court granted summary judgment and a permanent injunction for three private plaintiffs: the State of Washington (specifically its instrumentality, the University of Washington); Burlap and Barrel, Inc.; and Basic Fun, Inc.  Specifically, the CIT found that these entities had standing because they were direct importers with shipments already scheduled to arrive, exposing them to immediate and concrete tariff liability and thus establishing their right to bring suit.

• State Importer Plaintiffs: Conversely, claims for 23 other states were dismissed without prejudice.  These states attempted to argue that they would suffer indirect economic harm, such as paying higher prices passed down by third-party importers.  The CIT ruled that these indirect injuries relied on the unpredictable choices of independent actors, making them too speculative to establish constitutional standing.  As a result, the CIT held that these states failed to establish standing and dismissed their claims.

The Rationale: Why the Tariffs Were Ruled Unlawful

The Court’s ruling rested exclusively on a strict statutory interpretation.  In particular, to lawfully invoke Section 122, the statute requires the President to explicitly identify “large and serious United States balance of payments deficits” as Congress intended the term in 1974.

The Court concluded that the President exceeded his authority because the Proclamation failed to meet this specific condition.  The rationale provided is as follows:

• 1974 Legislative Intent: The CIT looked to the legislative history of the Trade Act of 1974 and determined that Congress understood “balance of payments deficits” to mean deficits measured by three specific accounting methods: (i) liquidity; (ii) official settlements; or (iii) basic balance.   
  
• The President’s Metrics: Instead of relying on the above-mentioned historical metrics that Congress intended to be used, Proclamation 11012 relied on modern economic measurements to justify the tariffs, citing a massive current account deficit, a large trade deficit, and a negative net international investment position.  The majority held that trade deficits and current account deficits are distinct from a “balance of payments deficit” under the statute.  Because the Proclamation substituted these measures for the statutorily required balance of payments deficits, the Court declared the Proclamation unlawful.

Remedy is Exclusive for Limited Importers

While the tariffs were declared unlawful, the Court expressly declined to issue a universal, nationwide injunction barring their enforcement against all importers.  The CIT held that universal injunctive relief was not warranted because standing existed only with respect to the private importer plaintiffs, who could be made whole through plaintiff‑specific injunctive relief and refunds.  The Court further noted that the private plaintiffs did not advance any specific argument in support of a universal injunction, and that although certain state plaintiffs sought broader relief, their arguments assumed standing for all states, including non‑importing purchaser states, an assumption the Court rejected.  Finally, the Court held that Washington State’s alleged indirect harm from tariffs passed on by resellers was insufficient, with the Court noting that the potential for increased costs to one plaintiff is not an appropriate basis for the imposition of a universal injunction.

Accordingly, the Court limited relief to the prevailing parties.  Targeted relief was granted only to the three plaintiffs with standing, the State of Washington, Burlap and Barrel, and Basic Fun, each of whom is entitled to a permanent injunction and refunds with interest for any unlawfully collected Section 122 duties.  In practical terms, the Court’s limitation of relief to the importing plaintiffs means that any importer has standing to sue and can obtain relief for themselves.  Due to the fact that there is no universal injunction, individual complaints may be necessary for importers to obtain Section 122 refunds unless the Government extends existing IEEPA refund mechanisms to include potential refunds for the Section 122 tariffs.  At this juncture, it appears likely that the Government will appeal to the Federal Circuit and it is uncertain whether the Government would add any Section 122 refund functionality to the IEEPA refund process while any potential appeal is pending.

The Husch Blackwell International Trade and Supply Chain team will continue to monitor this and provide updates as they become available.  If you have any questions or concerns, please contact your Husch Blackwell attorney.