Yesterday, the U.S. Court of International Trade held that the Administration’s temporary 10% tariffs imposed under Section 122 of the Trade Act of 1974 are unlawful because they were not based on identified “large and serious” balance-of-payments deficits contemplated by Congress when enacting the statute.
The Court found that the three importer plaintiffs had standing and granted them a permanent injunction against the assessment of the Section 122 tariffs.
The decision suggests that other importers who paid these duties would also have standing. However, the Court did not address whether broader universal relief could be granted, and that issue remains an open question.
The decision was immediately appealed by the Government and is likely the first step in a significant appellate dispute. We also expect that the Court of Appeals for the Federal Circuit may stay the injunction pending appeal. Notably, the CIT decision was not unanimous, and thus, the possibility of reversal is greater than in the IEEPA case.
While importers seeking to recover Section 122 tariffs may ultimately need to file their own action before the Court of International Trade, for now we recommend waiting to see how the litigation develops.
We are closely monitoring this case and will provide updates as appropriate.
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For further information, please contact Gail Cumins at gcumins@spcblaw.com, Alli Baron at abaron@spcblaw.com or call us at 212-425-0055.
