Tariff Watch: Section 122 Tariffs Survive on Appeal, SCOTUS Declines 301 Case, CAPE Timeline Clarified

In this week’s edition of Tariff Watch from J.M. Rodgers, we’re reporting on a wave of definitive judicial rulings and impending regulatory deadlines. From a higher court reviving the controversial Section 122 global surcharge to the Supreme Court delivering a final blow to thousands of China tariff lawsuits, here’s what happened in the last week:

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What’s New

• The Federal Circuit stayed the ruling that found Section 122 tariffs unlawful: On June 11, the U.S. Court of Appeals for the Federal Circuit granted a stay that pauses a lower court’s May 7 injunction. The Federal Circuit noted that the government is likely to succeed on appeal, meaning Customs and Border Protection (CBP) will continue to collect the Section 122 global surcharge — which now reportedly reaches the statutory maximum of 15% — while the appeal proceeds.
• The Supreme Court declined to review a major Section 301 China tariff challenge: On June 15, the U.S. Supreme Court denied a petition to hear an appeal challenging the legality of USTR’s expansion of Section 301 tariffs on China (specifically Lists 3 and 4A). By declining to hear the case, the Court effectively cemented the lower court’s ruling that the tariffs are valid, thereby exhausting all appeals.
• CBP announced the rollout dates for Phases 2 and 3 of the IEEPA refund process: Following a recent hearing at the Court of International Trade (CIT), CBP said that Phase 2 of its CAPE refund portal (covering reconciliation and AD/CVD entries) will launch on June 29. Phase 3, which targets entries that have finally been liquidated, is slated for late July. However, CBP clarified that refunds will be processed only for importers who have filed specific lawsuits, given the ongoing Department of Justice appeal.
• The USTR is soliciting input on China import tariff relief: In the wake of recent diplomatic meetings, the USTR is seeking public comments to help identify up to $30 billion in “non-sensitive” Chinese imports that could receive tariff relief under a newly chartered US-China Board of Trade. The deadline for comments is July 10.

Who’s Impacted

This week’s judicial rulings and administrative actions will impact a broad swath of American businesses, including:

• Nearly all US importers: The Federal Circuit’s June 11 stay means the temporary relief many expected regarding the Section 122 global surcharge is gone. Importers across all sectors must continue to absorb or pass on the 10% to 15% added costs for the foreseeable future.
• Importers of Chinese goods: The more than 3,500 companies that filed lawsuits at the CIT hoping for refunds on List 3 and 4A tariffs will almost certainly see their cases dismissed following the Supreme Court’s June 15 denial. However, importers of “non-sensitive” Chinese goods have a rare new opportunity to petition for tariff reductions through the USTR’s Board of Trade mechanism.
• Importers owed IEEPA Refunds on older entries: Businesses holding finally liquidated entries from the earliest months of the IEEPA tariff period are in a precarious position. CBP’s confirmation that Phase 3 refunds will be restricted to litigating plaintiffs means those who did not file suit are currently locked out of recovering their funds.

What We’re Seeing

Proactive supply chain leaders are getting ahead of this week’s developments. Here’s how:

• Businesses are aggressively protesting Section 122 entries: After the Section 122 tariffs survived this round of appeals, some companies have decided not to take any more chances. Importers are diligently filing protests and maintaining meticulous entry records to preserve their right to a refund if the tariffs are ultimately ruled unlawful at the end of the appellate process.
• Importers are rushing to build economic cases for the USTR: To capitalize on the U.S.-China Board of Trade opportunity, companies are actively drafting detailed comments demonstrating that their Chinese-origin goods are “non-sensitive” (posing no national security risks) and are vital to the U.S. economy.

What We’re Monitoring

This week’s ongoing stories are just as important as the latest news. Here are the developing situations that the J.M. Rodgers team is keeping an eye on:

• The July 24 Section 122 expiration date: Section 122 is a temporary balance-of-payments authority limited by statute to 150 days. This means the current global surcharge is scheduled to expire on July 24, 2026. We’re watching closely to see whether Congress takes action to extend it or the administration attempts to transition the tariffs to a permanent footing under a different statutory authority.
• The CAPE Phase 2 rollout: We’re gauging CBP’s readiness to handle an estimated 2.8 million additional refund requests ahead of the June 29 launch. We’ll be paying especially close attention to the portal’s stability as a projected $28.7 billion in refunds are expected to be processed in this phase.
• Mass dismissals at the CIT: Following the Supreme Court’s refusal to hear the Lists 3 and 4A tariff challenge, we are monitoring the CIT docket for the expected mass dismissal of the thousands of related cases that had been stayed pending the high court’s decision.

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Sources

• Federal Appeals Court Keeps Trump’s 10 Percent Global Tariff in Place, Jurist
• U.S. Supreme Court Declines Review of China Section 301 Tariff Challenge, SmarTrade
• IEEPA Tariff Refund Update, Holland & Knight
• USTR Solicits Industry Input, Skadden Arps