3/12/26 — Section 122 Tariffs Now Under Legal Challenge at the CIT
Within weeks of the President's February 20 proclamation imposing a 10% global tariff under Section 122 of the Trade Act of 1974, two separate lawsuits have been filed at the U.S. Court of International Trade challenging the legality of those tariffs.
The first suit, Oregon v. Trump, was filed on March 5, 2026 by a coalition of twenty-four states (including twenty-two state attorneys general and the Democratic governors of Kentucky and Pennsylvania). The second, Burlap and Barrel, Inc. v. Trump (Court No. 1:26-cv-01606), was filed on March 9, 2026 by two private companies represented by the Liberty Justice Center, the same organization that won the Supreme Court's landmark IEEPA ruling in V.O.S. Selections, Inc. v. Trump earlier this year.
Both cases have been assigned to a three-judge panel consisting of Chief Judge Mark A. Barnett, Judge Claire R. Kelly, and Senior Judge Timothy C. Stanceu.
The Legal Arguments
Both lawsuits challenge the Section 122 tariffs on overlapping but distinct grounds.
It is also worth noting that the states' complaint points out that Section 122 "has never been used to impose tariffs" and "has never been used in any way at all" since its enactment in 1974. The reason is that the statute was designed to address short-term balance of payments crises under the fixed exchange rate system that prevailed before 1976. Under the floating exchange rate system the United States has used for the last fifty years, the exchange rate adjusts automatically, which means the type of crisis Congress had in mind when it enacted Section 122 arguably cannot arise in the modern monetary system.
The Nondiscrimination Argument
Both lawsuits also argue that the tariffs violate Section 122's requirement that import restrictions be "applied consistently with the principle of nondiscriminatory treatment" and be "of broad and uniform application with respect to product coverage." The proclamation, however, exempts many goods from Canada, Mexico, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua, and includes more than 80 pages of product-specific exceptions. The plaintiffs argue that these carve-outs are inconsistent with the statute's uniformity requirement.
The Constitutional Arguments
The Burlap and Barrel complaint adds a constitutional dimension, arguing that reading Section 122 as broad enough to authorize the tariffs the President has imposed would violate both the major questions doctrine and the nondelegation doctrine. The major questions doctrine (which played a significant role in the Supreme Court's IEEPA decision) requires Congress to "speak clearly" when granting sweeping economic authority. The nondelegation argument is that if Section 122 were interpreted as broadly as the Administration reads it, the statute would constitute an unconstitutional "sweeping delegation of legislative power" without an intelligible principle to guide the President's discretion.
Expected Timeline
If the Section 122 litigation proceeds at the same pace as the IEEPA challenges, oral arguments could occur in mid-April, with a CIT decision around the beginning of May. A Federal Circuit appeal could follow, with arguments around early July and a decision by late July. However, commentators have noted that the 150-day statutory period for Section 122 tariffs expires on July 24, 2026, which could affect the urgency and pace of the litigation. Once the tariffs expire, the courts may have less incentive to expedite proceedings on the question of prospective relief, though the refund question would remain live.
It is unclear whether the plaintiffs will seek a preliminary injunction to halt the tariffs before a merits decision is reached.
This is an informational site maintained by Nakachi Eckhardt & Jacobson, P.C., a trade law firm specializing in customs and international trade matters. If you need legal assistance evaluating your tariff exposure or refund strategy, please contact the firm directly at www.tradelawcounsel.com.