Importers have paid roughly $25 billion in Section 122 duties since February, by industry estimates. A federal court has ruled the tariff unlawful. And yet, as of today, CBP is still collecting 10% at the border and only three plaintiffs are actually owed refunds.
If you imported anything into the United States between February 24 and now, this article explains where your money stands, what has to happen for refunds to open up to everyone, and the steps that protect your claim while the appeal plays out. It is written for importers, not lawyers, and nothing here is legal advice. Your customs broker or trade counsel should confirm how each step applies to your entries.
The short answer
The 10% Section 122 surcharge, imposed under Proclamation 11012 and collected under HTS heading 9903.03.01, was ruled unlawful by the U.S. Court of International Trade on May 7, 2026. But the court's refund order covers only the plaintiffs who sued: Burlap and Barrel, Basic Fun, and the State of Washington. The government appealed, and on June 11 the Federal Circuit stayed the ruling, so CBP keeps collecting the duty from everyone else while the appeal proceeds. For every other importer, refunds are possible but not guaranteed, and whether you can ever collect may depend on steps you take before your entries liquidate.
How we got here, in plain English
The timeline matters because your refund rights hang on it.
February 20, 2026. The Supreme Court ruled in Learning Resources, Inc. v. Trump that IEEPA does not authorize tariffs, wiping out the reciprocal tariff program. Within hours, the White House issued Proclamation 11012, invoking Section 122 of the Trade Act of 1974, a balance-of-payments authority that allows a surcharge of up to 15% for a maximum of 150 days.
February 24, 2026. The new surcharge took effect at 10% ad valorem on most imports, reported under 9903.03.01, with exemptions for Annex II products, USMCA-qualifying goods, Chapter 98 entries, and goods already covered by Section 232 duties.
May 7, 2026. In Oregon v. United States and Burlap and Barrel, Inc. v. United States (Slip Op. 26-47), a divided three-judge CIT panel held the proclamation invalid. The court found that the economic indicators the administration cited were not the kind of "balance-of-payments deficits" Congress meant when it wrote Section 122 in 1974. The court ordered duties refunded with interest, but only to the plaintiffs with standing. Twenty-three states were dismissed from the case.
May 8 to June 11, 2026. The government appealed to the Federal Circuit, which issued an administrative stay on May 12 and then, on June 11, granted a full stay pending appeal. In doing so, the appeals court signaled the government is likely to win on the merits. Collection continues.
July 24, 2026. Regardless of the appeal, the surcharge hits its 150-day statutory wall and expires at 12:01 a.m. Only Congress can extend it, and nothing is moving to extend it. (Our full breakdown of the expiration is here.)
So the tariff will stop being collected on July 24 no matter what. The refund question, covering everything paid between February 24 and July 24, lives on in court well past that date.
Who is owed a refund right now
Three parties: Burlap and Barrel (a spice importer), Basic Fun (a toy company), and the State of Washington, through the University of Washington's direct imports. The CIT's injunction and refund order reach them alone. If your company is not one of those three, you are owed nothing today, and the Federal Circuit's stay means even those refunds are on hold while the appeal runs.
What happens if the government loses the appeal
This is the scenario every importer should be positioned for. If the Federal Circuit affirms the CIT (or the Supreme Court eventually does), the legal basis for every dollar collected under 9903.03.01 collapses. What happens next is not automatic, and this is the part most importers get wrong: an appellate loss for the government does not mail you a check. Refund mechanics would likely run through the normal customs process, which means your entries, their liquidation status, and any protests you have filed determine whether you can actually recover.
The IEEPA precedent is instructive. The Supreme Court struck those tariffs down on February 20, and it still took a brand-new CBP system (the CAPE portal, launched April 20) before the first refund payments began moving on May 11, with filings running through licensed brokers. Nearly three months from final ruling to first dollar, and that was with a definitive Supreme Court decision. A Section 122 refund path would follow the same kind of timeline at best, which is exactly why entries preserved today are the ones that get paid later.
How to protect your refund rights today
Five moves, all standard customs practice, all worth confirming with your broker:
1. Inventory your exposure. Pull every entry since February 24 that carries 9903.03.01. Your broker can run this from ACE in minutes. Know your total: entries, entered values, and duty paid.
2. Watch liquidation dates. Entries typically liquidate about a year after entry, and liquidation starts the clock on your rights. Once an entry liquidates and the protest window closes, recovering duty on it becomes dramatically harder, appeal or no appeal.
3. File protests to preserve claims. A protest under 19 U.S.C. 1514 must generally be filed within 180 days of liquidation. Protesting Section 122 duties on liquidating entries is the standard way to keep those entries legally alive while the litigation resolves. Some importers are also requesting extended liquidation. Your broker or trade counsel can set this up as a routine process rather than a fire drill.
4. Keep paying correctly in the meantime. The stay means the duty is still legally owed. Underpaying or misclassifying to dodge it creates penalty exposure that will outlast the tariff itself.
5. Do not forget drawback. CBP has confirmed drawback remains available for Section 122 duties. If you re-export or destroy imported merchandise, that is a recovery path that exists regardless of how the appeal ends.
What about IEEPA refunds?
Separate tariff, separate track, and for many importers a much bigger number: an estimated $166 billion paid by roughly 330,000 importers. Those refunds are already moving through CBP's CAPE portal, with first payments having begun May 11, and only licensed brokers can file. If you have not started, see our complete CAPE portal guide and run your numbers on the free IEEPA Refund Estimator. And beware refund recovery scams, which we covered when the portal opened.
What replaces Section 122 after July 24
Do not plan on August imports being surcharge-free. USTR's forced-labor Section 301 proposal, covering rates of 10% to 12.5% across 60 economies, has its hearing on July 7, timed almost exactly to the Section 122 expiration. And on June 15 the Supreme Court declined to review the long-running challenge to the China Section 301 List 3 and 4A tariffs, locking those in place. The instrument is changing; the direction is not. Run your specific HTS codes through our tariff calculator to see your landed cost under what is currently in effect.
FAQ:
Is the Section 122 tariff still being collected? Yes. Despite the CIT ruling it unlawful on May 7, the Federal Circuit stayed that decision on June 11, so CBP continues collecting the 10% surcharge under 9903.03.01 until the tariff expires July 24, 2026.
Is the Section 122 tariff 10% or 15%? 10%. The statute allows up to 15%, and an increase to 15% was announced but never formalized in a proclamation or CBP guidance. Every entry filed under 9903.03.01 has been assessed at 10%. Any source telling you 15% is repeating an announcement that never became law.
Do I get a refund when the tariff expires on July 24? No. Expiration only stops future collection. Refunds of duties already paid depend on the appeal outcome and on the status of your individual entries.
How long do I have to file a protest? Generally 180 days from liquidation of the entry, not from the date you paid. Since entries liquidate on a rolling basis, this is an ongoing process to manage, not a single deadline.
Can my freight forwarder handle this? Refund preservation runs through your customs broker and, for larger exposures, trade counsel. A good forwarder makes sure the entry data, HTS classifications, and documentation behind your claim are clean, and coordinates the broker relationship. That is exactly the work we do with our customs partners.
Planning shipments around the July 24 transition? Gateway Lines is a licensed ocean freight forwarder. We quote all-in, same day: ocean freight, customs clearance, insurance, and delivery in one number, with free live tracking on every container. Check live spot rates on the Ocean Rates Board, run your duty exposure on the tariff calculator, or send us your next shipment to price.
Published July 6, 2026. Gateway Lines monitors the Federal Circuit appeal and CBP guidance; this article will be updated as rulings land. Learn more at tariff.gatewaylines.com