Federal Circuit stays § 122 tariff injunction pending appeal

On 11 June 2026 the U.S. Court of Appeals for the Federal Circuit granted the federal government’s motion to stay pending appeal of the U.S. Court of International Trade’s 7 May 2026 judgment in The State of Oregon v. United States and Burlap and Barrel, Inc. v. United States (consolidated appeals Nos. 2026-1804 and 2026-1805), extending the administrative stay the panel had entered on 12 May 2026 and allowing U.S. Customs and Border Protection to resume collection of the 10 percent ad valorem global tariff imposed by Proclamation 11012 under section 122 of the Trade Act of 1974 from the three enjoined plaintiffs during the appellate proceedings.¹²³ The Court of International Trade panel of three judges, sitting under 28 U.S.C. § 255(a), had held 2-1 that the “current account and trade-balance deficits on which the proclamation relied do not constitute” the “large and serious United States balance-of-payments deficits” required by 19 U.S.C. § 2132(a) to authorise the imposition of an ad valorem surcharge of up to 15 percent for not more than 150 days, and entered summary judgment for three plaintiffs — the State of Washington, Burlap and Barrel, Inc., and Basic Fun, Inc. — with a permanent injunction against collection from those plaintiffs; the panel dismissed the remaining 23 state plaintiffs, including lead plaintiff Oregon, for lack of standing.⁴²⁵ The Federal Circuit’s stay order, applying the four-factor test of Nken v. Holder, 556 U.S. 418, 434 (2009), found that the government had shown a sufficient likelihood of success on the merits on appeal because the Court of International Trade’s interpretation of “balance-of-payments deficits” within section 122 “may be incorrect,” and that the balance of equities and the public interest favoured staying the CIT’s permanent injunction.¹⁶

1. Section 122 of the Trade Act of 1974, codified at 19 U.S.C. § 2132, authorises the President to “proclaim, for a period of not more than 150 days … a temporary import surcharge, in the form of duties (in addition to those already imposed, if any) not to exceed 15 percent ad valorem” if necessary to deal with “large and serious United States balance-of-payments deficits,” to “prevent an imminent and significant depreciation of the dollar in foreign exchange markets,” or to “cooperate with other countries in correcting an international balance-of- payments disequilibrium.” The same subsection limits the surcharge to 150 days “unless such period is extended by Act of Congress.”⁴⁷

2. The Federal Circuit’s stay-pending-appeal standard under Nken v. Holder, 556 U.S. 418, 434 (2009), requires the movant to show (1) a strong likelihood of success on the merits; (2) irreparable injury absent a stay; (3) the balance of equities favours a stay; and (4) the public interest favours a stay. The 11 June 2026 stay order addresses the first factor by finding the CIT’s interpretation of “balance-of-payments deficits” in section 122 “may be incorrect” — a phrasing short of a definitive merits assessment but sufficient to satisfy the likelihood-of-success threshold the panel applied. The order extends the administrative stay first entered 12 May 2026 from a status-quo preservation mechanism into a substantive stay pending appellate adjudication.⁶⁸

3. The Court of International Trade’s summary-judgment relief was limited by the panel’s dismissal of 23 of the 24 state plaintiffs for lack of standing; the State of Washington was the sole state plaintiff whose proprietary importing interests supported Article III standing, and the panel expressly declined to extend relief beyond the three prevailing plaintiffs in light of Trump v. CASA, Inc., 145 S. Ct. 2540 (2025). Because the injunction never reached other importers, U.S. Customs and Border Protection collection from non-parties continued throughout; the Federal Circuit stay restores collection authority as to the three prevailing plaintiffs pending appeal.⁹⁵

4. The parallel litigation tracks at the Court of International Trade and the Federal Circuit follow the Supreme Court’s 20 February 2026 ruling in Learning Resources, Inc. v. Trump, No. 24-1287, consolidated with Trump v. V.O.S. Selections, Inc., No. 25-250, holding that the International Emergency Economic Powers Act, 50 U.S.C. § 1702(a)(1)(B), does not authorise the President to impose tariffs; following that ruling, the administration substituted the section 122 surcharge for the IEEPA tariffs, which is the instrument the CIT panel held unlawful on 7 May 2026 and that the Federal Circuit has now ordered may continue to be collected during appeal. The Federal Circuit’s appellate jurisdiction over CIT decisions is exclusive under 28 U.S.C. § 1295(a)(5); appeals to the Supreme Court lie on writ of certiorari under 28 U.S.C. § 1254(1) after final Federal Circuit judgment.¹⁰¹¹¹²

Corrections

• 2026-09-24: The post placed the 150-day limit on § 122 surcharges at 19 U.S.C. § 2132(b) and described an extension by joint resolution under § 2132(d). The 15 percent cap, the 150-day limit and extension “by Act of Congress” are all in § 2132(a); § 2132(b) is the national-interest exception and § 2132(d) concerns nondiscriminatory treatment.⁷