Almost immediately after the U.S. Supreme Court ruled in February that President Donald Trump didn’t have the authority to impose global tariffs under the International Emergency Economic Powers Act, the president ordered a temporary, blanket 10% duty under Section 122 of the Trade Act of 1974.

Trump authorized the temporary 10% global tariff under Section 122 in February, the day the U.S. Supreme Court deemed the tariffs he had imposed under the International Emergency Economic Powers Act unlawful. Section 122 allows the president to impose a tariff of up to 15% for 150 days to address specific economic circumstances, with the option for Congress to approve an extension. (That tariff is set to expire July 24.)

On May 7, the federal Court of International Trade ruled against the new Section 122 duty after two dozen states and two small businesses sued. The majority wrote that the tariffs are “invalid” and “unauthorized by law,” The Associated Press reported. Two of the three judges found that the administration’s interpretation of the law was too broad and its specific conditions for imposing tariffs were not met.

  • The judges granted an injunction pausing the 10% duty only for the three parties found to have standing in the lawsuit: Burlap & Barrel, Basic Fun and Washington state.


The administration appealed the decision on Tuesday and was granted a stay, which means importers will continue paying the Section 122 tariffs while the appeal progresses in the courts – first to the U.S. Court of Appeals for the Federal Circuit and likely to the Supreme Court.

ICYMI: Trump’s New Global Tariffs Rejected By Federal Court, But Initial Pause Lifted For Now

Attorney Josh Zive tells Law360 that the government “may have a better chance of earning a favorable ruling at the Federal Circuit” – which issued the stay pausing the trade court’s injunction – because unlike the duties that were imposed under IEEPA, which does not mention the word tariff, the temporary global tariff under Section 122 provides the president with explicit authority to impose those duties under certain economic conditions.

This means prolonged uncertainty as the legal challenge plays out. From filing to the ultimate decision, the lawsuit opposing the IEEPA tariffs lasted roughly nine months on an expedited timeline, so it’s reasonable to expect a similar timeline for the Section 122 challenge.

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Meanwhile, more businesses could sue and potentially seek refunds, and the Trump administration continues to pursue other methods for imposing import duties.

  • In March, the Office of the U.S. Trade Representative launched investigations into 60 trading partner nations into potential forced labor and overproduction allegations, a step required to enact new tariffs under Section 301 of the Trade Act of 1974.


It’s important to note that sector-specific tariffs on imports including steel, aluminum, auto parts and pharmaceuticals remain in place and are not affected by the court rulings. That said, this week, the Commerce Department announced it will consider halving the current Section 232 tariff rate for Canadian and Mexican companies committing to making more metal products in the U.S.

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Refunds In Process For IEEPA Tariffs

It’s too early to talk about potential refunds for the 10% blanket tariffs, as they are still in effect while the courts consider the challenge.

But U.S. Customs and Border Protection launched its online refund portal for the invalidated IEEPA duties on April 20, and by the first week of May, claims covering roughly 1.74 million entries had cleared the initial validation steps. CBS News reports that the federal government said it had approved nearly 87,000 refund requests by May 11, amounting to refunds of $35.5 billion, including interest.

  • The government owes importers an estimated $166 billion in refunds overall.


However, several million entries have been rejected (about 15% overall), reports CBS News, mostly for data entry errors or because they are not IEEPA payments and therefore not eligible. (See CBP’s error definitions here.) The first phase of the Consolidated Administration and Processing of Entries, or CAPE, program to administer refunds applies only to entries that:

  • Include dutiable IEEPA HTS Chapter 99 codes.
  • Are either unliquidated or liquidated within the last 80 days.
  • Are not flagged for reconciliation, covered by an open protest, part of a drawback claim, more than 80 days past liquidation, or subject to pending AD/CVD liquidation instructions.


ICYMI: Tariff Refund Process Begins; Eligibility, Timeline Explained

Customs and Border Protection is reportedly working on the next phase of the CAPE refund program to address imports with more complicated circumstances, and its next progress report is due to the court May 26.

The agency also issued a warning atop its IEEPA Duty Refunds page to beware of scammers using social media, email and other communication methods to obtain proprietary information from importers. Key precautions include:


Should Distributors Expect Refunds From Suppliers?

The answer to that question is quite complicated, and it may be impossible to set a universal template for what distributors can expect to hear from suppliers when bringing up the issue. However, setting more contextualized expectations could help produce productive dialogue.

Perhaps the most important factor to remember is that many suppliers were choosing to offer pre-tariff prices as they were learning of the developments, and then many absorbed much of the tariff costs once they went into effect.

  • “The idea that suppliers are in a position to recoup rebates and then distribute rebates is unrealistic,” says one PPAI supplier member, who wished to remain anonymous.


How many suppliers absorbed the costs of tariffs and to what degree is not something PPAI can speak to exactly, but PPAI Research has been tracking the growth of both distributors and suppliers throughout 2025 and into 2026.

  • From essentially the point tariffs were introduced in 2025, PPAI Research has indicated that distributors have been growing at a higher rate than suppliers, suggesting that the latter are bearing a larger brunt of the tariff burden.


Meanwhile, consumers have filed a number of proposed class action lawsuits seeking refunds of costs tied to tariffs, targeting companies including Costco, Nike, Nintendo, Sony, Temu and more. FedEx is also facing a tariff refund lawsuit from consumers despite announcing that it will pay back any tariff charges to customers if it receives a refund from the government.

ICYMI: FedEx Vows To Issue Tariff Refunds It Receives To Shippers, Consumers

PPAI will continue to monitor these developments and provide updates. Subscribe to PPAI Newslink to have these delivered straight to your inbox twice a week.