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

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.

There is an irony in this situation: the Section 122 tariff was probably going to expire on its own in a matter of weeks. And yet fierce judicial battles are being fought over whether it is legally valid. That is the paradox of the 2026 legal trade war: people are fighting over precedents, not immediate dollars. Precedents last. Temporary tariffs do not.

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.

When a court says "you might be right, we will take a closer look," that is not a victory. It is a pause. For importers waiting on refunds, the distinction between a pause and a win has real financial consequences. For the Trump administration, it is a welcome respite in a string of commercial judicial defeats. But a respite is not a victory either.

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.

I hear the legal arguments on the non-delegation doctrine. They are serious arguments, and I am not a constitutional scholar. But when I think about the thousands of small importers who have been waiting months for refunds that keep receding, I wonder whether our legal system has internalized the human cost of prolonged uncertainty. Perhaps not. Perhaps that should be a question judges ask themselves.

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 Trump administration has one option: ask Congress to legitimate what the courts keep challenging. That would be the constitutionally sound path — and it is precisely what the Supreme Court recommended when it struck down the IEEPA tariffs. The power to tax belongs to Congress. When the executive wants to tax, it should go through Congress. That is not a bureaucratic obstacle. That is democracy.

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.

The non-delegation doctrine is one of the most technical and least accessible areas of American constitutional law. But its practical reach is immense: if courts apply it strictly, entire swaths of American trade policy — not just Trump's tariffs — could be invalidated. It is a double-edged weapon that even Trump's opponents should handle with care.

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.

I am not an economist. But I understand what prolonged uncertainty means for people who run real businesses. When the rules change every six months — by decree, by court order, by policy reversal — you cannot plan. And when you cannot plan, you do not invest. And when you do not invest, the economy slows. The legal trade war has concrete victims.

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.

When industry associations are suing their own government's tariffs in trade courts, it is a sign that something went fundamentally wrong in the ordinary political consultation process. Healthy trade policy is built with industry, not against it. What this series of lawsuits reflects is the decision-making isolation of an administration that prefers executive orders to negotiations.

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.

I am not opposed to the idea that Congress reclaims its trade prerogatives. In theory, it is constitutionally correct and democratically desirable. In practice, a Congress that must vote on every trade tariff would be paralyzed in the current political climate. There is a real tension between constitutional purity and governmental effectiveness. I have no simple answer — only a preference for transparency in that debate.

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.

I look at this chapter of American trade and I see one thing: the usefulness of judicial institutions as a counterweight to executive discretionary power. Whether Trump was right or wrong on tariffs is an economic and political question. Whether the courts have the right to examine it is a constitutional question. And on that question, I am convinced: yes, they have that right. And they exercised it.

By Maxime Marquette, columnist

Editorial stance

I am not a journalist but a columnist and analyst. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies.

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