On February 20, 2026, the Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the imposition of tariffs. Later that same day, President Trump announced that he was imposing a temporary 10% surcharge on imports using Section 122 of the Trade Act of 1974 (19 U.S.C. § 2132). This is the first time a President has used Section 122.
See: 91 FR 9339 (February 25, 2026).
Section 122 authorizes the President to impose temporary import duties or surcharges "[w]henever fundamental international payments problems require special import measures to restrict imports (1) to deal with large and serious United States balance-of-payments deficits, (2) to prevent an imminent and significant depreciation of the dollar in foreign exchange markets, or (3) to cooperate with other countries in correcting an international balance-of-payments disequilibrium." President Trump's actions have raised questions about the meaning of the term "balance-of-payments deficits" as it is used in Section 122.
See: CRS Report IF13199 (April 9, 2026).Sec. 122 of the Trade Act of 1974. as amended.
See: Sec. 122 of the Trade Act of 1974, as Amended through P.L. 119–75, Enacted February 3, 2026.
On May 7, 2026, The United States Court of Internation Trade, in a devided decision, struck down Trump's Section 122 tariff action.
See: Slip Op. 26-47 (May 7, 2026).
On May 12, 2026, several non-governmental sources reported that the United States Court of Appeals for the Federal Circuit stayed the CIT's judgment while the court considers such relief.
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