On February 20, 2026, President Donald J. Trump issued Proclamation No. 11012, titled Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems. The proclamation imposed a temporary 10% ad valorem import surcharge on most goods entering the United States pursuant to Section 122 of the Trade Act of 1974, which authorizes temporary import restrictions to address “fundamental international payments problems,” including significant balance-of-payments deficits or currency instability
The surcharge became effective on February 24, 2026, and was to remain in place for a period of up to 150 days (through July 24, 2026), unless earlier terminated or extended by Congress. The measure was implemented contemporaneously with, and in practical effect as a replacement for, tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA), which were declared unconstitutional by the Supreme Court on the same date.
Decision of the Court of International Trade
On May 7, 2026, the United States Court of International Trade (CIT) held that Proclamation 11012 was contrary to law, therefore invalid, and permanently enjoined its enforcement as to the plaintiffs. See The State of Oregon, et al. v. Trump, et al. (1:26-cv-01472-3JP) and Burlap and Barrel, inc., et al. v. Trump, et al. (1:26-cv-01606-3JP). The court further ordered that all Section 122 duties paid by the plaintiffs be refunded with interest.
Appellate Proceedings and Stay
The administration has appealed the decision to the United States Court of Appeals for the Federal Circuit and sought an immediate stay pending appeal. On May 12, 2026, the Federal Circuit granted a temporary stay, which remains in effect pending further order while the court considers whether to maintain the stay during the pendency of the appeal.
Implications for Importers
Importers should be aware that, notwithstanding the CIT’s decision, any entitlement to refunds remains uncertain. Recovery will depend on the outcome of the appellate proceedings, including any potential review by the Supreme Court.
Update on CBP CAPE Phase I IEEPA Refund System
On May 12, 2026, U.S. Customs and Border Protection (CBP) submitted a status report to the CIT regarding the Consolidated Administration and Processing of Entries (CAPE) Phase I system.
As of May 7, 2026:
- More than 8.3 million entries, representing approximately $35.46 billion, have been identified as potentially eligible for refund.
- A portion of these entries has already been processed through the CAPE Refund component and transmitted to the U.S. Department of the Treasury for payment.
CBP is expected to submit a further update to the court on May 26, 2026.