TESTIMONY: The Federal Circuit upholds the 10% tariff — American trade holds its breath

TESTIMONY: The Federal Circuit upholds the 10% tariff — American trade holds its breath

Introduction: an unexpected reprieve for Trump's global tariff

June 11, 2026: the trade appeals court says no to immediate refunds

On June 11, 2026, the Federal Circuit Court of Appeals granted a stay of execution of the Court of International Trade (CIT) ruling that had struck down the 10% global tariff based on Section 122 of the Trade Act of 1974. This decision suspends the obligation to immediately refund duties collected while the appeal runs its course. For the 330,000 American importers who were counting on rapid refunds, it means yet another delay — and one more layer of uncertainty in an already unstable commercial landscape.

Why Section 122 is different from IEEPA

Unlike the IEEPA tariffs struck down by the Supreme Court in February 2026, the Section 122 tariff rests on a provision of the Trade Act of 1974 that explicitly authorizes the president to impose temporary additional duties in cases of a serious trade deficit. The legal ceiling is 150 days — and this tariff was set to automatically expire around July 24, 2026, barring a congressional extension. That limited duration is precisely what complicates the legal landscape: the CIT had struck it down before its natural expiration, and the Federal Circuit concluded it deserved thorough examination before that deadline.

The CIT's ruling: why the trade court had struck it down

The central argument: unconstitutional delegation

The CIT had struck down the Section 122 tariff using the same reasoning the Supreme Court applied to IEEPA: the non-delegation doctrine. Under that theory, Congress cannot delegate such broad and loosely defined taxing authority to the executive without an intelligible principle guiding its exercise. The CIT concluded that Section 122, which allows the president to impose up to 15% in additional duties for 150 days, does not sufficiently define the conditions under which that power may be used.

The difference between invalidation and suspension

By granting a stay of execution, the Federal Circuit did not rule that the CIT was wrong. It only said that the government had "sufficiently established that it was likely to succeed on the merits" — a legal standard far less demanding than a final victory. This is a procedural decision, not a substantive one. It keeps the tariff in effect during the appeal, prevents immediate refunds, and allows the legal debate over the constitutionality of Section 122 to proceed before the full court.

The 330,000 importers: testimonies from an economy under strain

The hardest-hit sectors

Among the 330,000 importers who had been counting on refunds through the CAPE portal opened in April 2026, the most exposed sectors are consumer electronics, textiles, industrial machinery, and chemical products. Small and medium-sized businesses had reported compressed margins since the tariffs were imposed in 2025, and some had factored the expected refunds into their financial projections for the third quarter of 2026. The Federal Circuit's stay pushes those projections back further.

Planned uncertainty as a strategy

What the testimonies of entrepreneurs and CFOs collected by multiple business media outlets in June 2026 reveal is that prolonged uncertainty is not economically neutral. It blocks investment decisions, delays orders, and forces businesses to maintain higher cash reserves instead of deploying capital. The Federal Circuit may have made a legally defensible decision — but its concrete economic impact on thousands of American businesses is real and measurable.

The July 24, 2026 deadline: a race against the clock

The automatic expiration of the Section 122 tariff

Section 122 limits emergency tariffs to 150 days. The 10% global tariff imposed by the Trump administration was therefore set to automatically expire around July 24, 2026. This raises an interesting legal question: if the tariff expires before the Federal Circuit issues a ruling on the merits, does the appeal become moot? The answer is not simple — questions of retroactive refunds would remain in play even after expiration.

The possibility of a congressional extension

The Trump administration explored asking Congress for a legislative extension of the Section 122 tariff beyond the 150-day limit. Such an extension would resolve some constitutional problems by giving the tariff an explicit legislative foundation. However, an extension would require a vote in both the Senate and the House of Representatives, which is far from guaranteed in the political climate of 2026, even with a Republican Congress.

The IEEPA precedent and its influence on Section 122

Similar legal logic

The Supreme Court had struck down the IEEPA tariffs in February 2026 on the grounds that the president does not hold implicit authority to impose commercial taxes without an explicit congressional delegation. The same reasoning can apply to Section 122: even if Congress explicitly provided for this power, the question is whether the limits it imposed (duration, magnitude, conditions) are specific enough to constitute a constitutionally valid delegation. Both cases raise related questions about the limits of legislative delegation.

Why the Federal Circuit may reason differently from the Supreme Court

Unlike IEEPA, whose taxing authority was drawn implicitly from the text of the statute, Section 122 explicitly mentions the possibility of imposing additional duties. That more direct textual anchor is the government's central argument before the Federal Circuit. The court could conclude that this anchor is sufficient to satisfy constitutional requirements — even if the debate over the non-delegation doctrine remains open following the Supreme Court's recent decisions.

Consequences for American trade policy

A fragmented and contested tariff landscape

In June 2026, American trade policy looks like a landscape of simultaneous judicial wars: the IEEPA tariffs struck down and subject to partial refund, the Section 122 tariff kept alive by a Federal Circuit stay pending appeal, the Section 301 tariffs on China maintained after the Supreme Court declined to hear the case, and the Section 232 tariffs on steel and aluminum maintained with modifications. Businesses must navigate this fragmented terrain with no visibility on what will still be legally valid in six months.

The impact on American competitiveness

Economists consulted by several media outlets in June 2026 noted that judicial uncertainty over tariffs has effects at least as destabilizing for business decisions as the tariffs themselves. Companies that had reorganized their supply chains to accommodate the IEEPA tariffs now face their removal. Those that maintained Asian partnerships while awaiting the elimination of Section 301 tariffs were disappointed. This instability creates what economists call a "political risk premium" in investment decisions.

The actors in the litigation: who are the challengers?

Industry associations and individual importers

The CIT litigation was brought by a consortium of industry associations and importers who challenged the Section 122 tariff from the moment it was imposed. Among the plaintiffs are companies in the electronics, apparel, and industrial machinery sectors. These parties have direct financial interests in the outcome: the duties collected since the tariff was imposed represent significant sums their members want to recover through retroactive refunds if the tariff is definitively invalidated.

The government's role in defending the tariff

On the government's side, the DOJ and the US Trade Representative (USTR) coordinated the defense of the Section 122 tariff before the Federal Circuit. Their central argument is that Section 122 of the Trade Act of 1974, by explicitly authorizing temporary emergency tariffs, provides a sufficient legislative basis to avoid the non-delegation problems that sank the IEEPA tariffs. The outcome of that argument will determine not only the fate of this tariff but also the future scope of presidential trade power.

The non-delegation doctrine: a double-edged weapon

A doctrine in resurgence under the current Court

The non-delegation doctrine — the idea that Congress cannot delegate unlimited legislative powers to the executive — had been largely dormant for decades before being revived by the Roberts Court. Its resurgence in the 2026 tariff cases is directly linked to the Supreme Court's decisions in related matters like Loper Bright in 2024. If the Federal Circuit applies this doctrine to Section 122, it would create a precedent potentially devastating for decades of American trade policy built on presidential delegations.

What this means for future presidents

The reach of the non-delegation doctrine extends far beyond the Trump administration. Democratic presidents have also used congressionally delegated trade powers to impose sanctions, sector-specific tariffs, or embargoes. If courts systematically tighten the requirements for explicit delegation, future presidents — of whatever political stripe — will have to return to Congress for every significant trade measure. Some constitutional scholars consider that healthy. Others see it as institutional paralysis.

Conclusion: July 24 as a date with uncertainty

What we are waiting for

Between now and July 24, 2026, two main scenarios emerge: either the Federal Circuit issues a swift ruling on the merits before the tariff expires, or the tariff expires on its own and the substantive question becomes largely moot — except for refunds on duties already collected. In either scenario, the battle over the constitutionality of Section 122 is not over: parties could petition the Supreme Court, which has already shown its interest in these delegation questions.

A signal for the future of trade policy

What this legal saga reveals is that trade policy by presidential decree is now systematically challenged in the courts. The era in which a president could impose sweeping tariffs without the courts taking notice is over. Whether that is seen as a healthy institutional development or as an obstacle to trade policy depends on the observer — but it is a new reality that any future administration will have to account for.

By Maxime Marquette, columnist

Columnist's transparency note

My convictions in this case

I believe the power to tax belongs constitutionally to Congress, not to the executive. I believe businesses and importers deserve legal stability in trade policy. These convictions shape my analysis. International trade is a technical field I do not master perfectly; I based this article on specialized sources and I acknowledge that.

Sources and method

This article is based on reporting from the Volokh Conspiracy (Reason), US News, the Federal Circuit Blog, WND, and Ground News. I did not have access to the full court decisions. No importer testimony has been invented — the general conditions documented in those sources are reported as such.

Sources

Primary sources

Reason / Volokh Conspiracy — Federal Circuit stays Section 122 tariffs ruling — June 11, 2026

US News — Appeals court extends block on ruling against 10% global tariff — June 11, 2026

Federal Circuit Blog — Recent news, Federal Circuit — June 16, 2026

Secondary sources

935 The Lloyd — US appeals court extends block on 10% tariff ruling — June 11, 2026

WND — Federal court hands win to Trump in tariff war — June 11, 2026

Ground News — Trump administration asks court to pause tariff ruling — 2026