The Tariff House of Cards: Two Schemes Down. Your Refund Window is Closing.

The Court Ruled Last Week. The Government Appealed the Next Day.

On the afternoon of May 7, 2026, the US Court of International Trade did something the legal community has been waiting for: it struck down a SECOND Trump tariff scheme in 90 days.

This time the target was Section 122 — the obscure provision the Trump administration invoked in February as a stopgap after the Supreme Court killed his IEEPA tariffs. The 10% global tariff. The one most importers are paying RIGHT NOW on virtually every import.

In a 2-1 decision authored by Chief Judge Mark Barnett, the court held that Section 122 cannot be used to address general trade deficits. The administration overreached. The tariff is illegal.

On May 8 — less than 24 hours later — the Department of Justice filed its notice of appeal to the Federal Circuit.

But Here's the Problem for Most Importers

The CIT ruling only applies to three plaintiffs: Burlap & Barrel (a specialty spice importer), Basic Fun! (toy importer), and the State of Washington.

Everyone else — including you — still has to pay the 10% tariff while the appeal plays out.

Unlike the IEEPA refunds — which are nationwide and automatic through the CAPE portal — Section 122 refunds require individual litigation. You have to sue. Or join a class action. Or formally preserve your rights through customs protests within the 180-day window after liquidation.

Two of three Trump tariff weapons have now been struck down. Only one of them refunds automatically.

The Numbers You Need to Know

IEEPA REFUNDS (the easy money):

• $166 billion in unconstitutional duties already paid
• 330,000 importers eligible
• 53 million entries affected
• April 20, 2026: CAPE refund portal opened
• 21% of submitted claims accepted so far
• First refunds: hit bank accounts May 11

SECTION 122 REFUNDS (the new fight):

• 10% ad valorem tariff on virtually all imports since February 24
• ~$50 billion in estimated duties paid since implementation
• Only 3 plaintiffs currently protected by injunction
• Importers must file individual cases to claim refunds
• Tariffs set to expire July 24, 2026 automatically anyway

THE NEW THREATS:

• 25% tariff on countries buying Iranian oil (active since January)
• 25% tariff framework for countries buying Russian oil (suspended for India February 2, but legal framework remains)
• 25% tariff on countries buying Venezuelan oil (active)
• Cuban oil tariffs signed January 29
• Section 301 investigations launched March 12 on 60+ countries for forced labor allegations — including Brazil, China, India, Mexico, Vietnam, and the EU
• Trump traveling to China this week for trade negotiations

The China Situation Could Blow Up This Week

While Section 122 is the immediate refund opportunity, the bigger threat is what comes next. Trump is in China this week. The administration has already threatened 25% tariffs on any country doing business with Iran — and China is Iran's largest trading partner.

If those Iran-secondary tariffs trigger on Chinese imports, US importers face a new wave of cost increases on top of existing Section 232, Section 301, and the 10% Section 122 tariffs.

Importers who haven't yet recovered their IEEPA refunds are about to face new tariff hikes — without the cushion of recovered money in their bank accounts.

The BRICS countries — Brazil, Russia, India, China, South Africa — sit at the intersection of overlapping investigations: Russian oil purchases, Iranian oil flows, and Section 301 forced-labor allegations. Every new front opens another refund-rights question importers will have to litigate.

What the Court Status Update Today Will Reveal

This afternoon, the picture of who's getting paid and who's still stuck becomes public.

Today, May 12 at the US Court of International Trade, Judge Richard Eaton holds a closed-door status conference on IEEPA refund progress. CBP must file its second progress report. The last filing (April 28) showed:

• 75,306 declarations filed
• 21% accepted
• 2.1 million entries rejected outright
• Only 3% reached the refund stage

Today's filing will update those numbers. It will reveal whether the first refunds actually paid on May 11 as expected. It will likely include the first official Phase 2 timeline.

For importers, May 12 is when the data goes public on who has filed clean and who is stuck. If you are stuck — every day from here costs you 80-day window time. If you have not filed — you are behind everyone who started in April.

The Gas Pump Is Already Telling You What's Coming

You're already paying for this whether you import or not.

$101/barrel Brent crude. $4.46/gallon US gas. 95% increase in jet fuel since the Iran war began. Fuel surcharges from UPS, FedEx, USPS, Amazon.

For US importers, every shipment from Asia adds 3-6% in war-driven cost. Every dollar of tariff refund you recover is a dollar that offsets that.

What to Do This Week

IF YOU HAVEN'T FILED FOR IEEPA REFUNDS YET:

1. Calculate your estimated refund (takes 60 seconds)
2. Verify your ACE Portal account has ACH banking set up
3. File before the May 12 status conference closes — every accepted entry locks in the refund
4. For refunds over $250,000: Stop trying to DIY — a pre-filing audit dramatically reduces rejection risk

IF YOU'VE BEEN PAYING SECTION 122 (the 10% global tariff):

1. Document every entry where Section 122 duties were paid since February 24
2. Consider filing a formal protest with CBP within 180 days of liquidation to preserve rights
3. Evaluate joining a class action — multiple legal teams are organizing
4. For Section 122 exposure over $500,000: Engage trade counsel now — individual CIT lawsuits may be required

FOR EVERY IMPORTER:

1. Review your contracts for tariff pass-through and refund allocation clauses
2. Track your cumulative tariff exposure — IEEPA + Section 122 + Section 232 + Section 301 all interact
3. Watch the appeals — Federal Circuit rulings could change everything in 30-60 days

The Closing Argument

Two of Trump's three biggest tariff weapons have now been ruled illegal in court. That money is yours. But only if you claim it.

The IEEPA tariffs collected in 2025: $166 billion. Refunds underway. Some importers received the first payments yesterday.

The Section 122 tariffs collected since February: ~$50 billion. Refundable only if you fight for it.

The Iran, Russia, Cuba, and Venezuela secondary tariffs: Still active. Still adding cost. Still potentially refundable if those frameworks fall too.

The total possible refund pool for US importers right now: $200+ billion.

The question isn't whether you're owed money. It's whether you'll claim it before the window closes.