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The CIT held oral arguments on constitutional challenges to the 10% universal tariff imposed under §122 of the Trade Act of 1974. Plaintiffs include a coalition of state attorneys general and the Liberty Justice Center.
Section 122 was revived as the primary tariff vehicle after Learning Resources v. Trump (SCOTUS, 2026-02-20) struck the administration's IEEPA-based tariff framework. Unlike Section 232 (requires Commerce investigation + 270 days) or Section 301 (requires USTR investigation + public comment), Section 122 allows the President to impose a surcharge up to 15% within days of invocation, on the stated basis of a balance-of-payments emergency. The trade-off is the 150-day statutory clock: absent Congressional extension, the surcharge expires. Two plaintiff coalitions , 24 state attorneys general led by Oregon and Arizona, and the Liberty Justice Center representing two small businesses , filed on March 5 and March 9 respectively, mirroring the coordinated litigation strategy that produced Learning Resources.
The administration's tariff agenda has now cycled through three statutory vehicles in six months: IEEPA (struck in Learning Resources), Section 122 (this case, contested), and Section 301 overcapacity (separate track, slow). This sequencing reveals that the tariff program depends on stretching existing statutes rather than pursuing bipartisan legislation. The 150-day Section 122 clock starts running from invocation; even a favorable CIT ruling for the administration may be mooted before it issues. Business Roundtable and US Chamber filed amici supporting plaintiffs , an unusual posture for Republican-aligned groups and signals that the universal surcharge threatens enough Fortune 500 supply chains that they are willing to litigate against the administration openly.
The only prior Section 122 invocation was Nixon's August 1971 10% surcharge, imposed during a documented balance-of-payments crisis that produced the collapse of Bretton Woods and the Smithsonian Agreement. Yoshida International v. United States (CCPA, 1975) upheld that surcharge, reasoning that the BoP emergency was genuine and the remedy proportionate. The administration's brief relies heavily on Yoshida; plaintiffs argue the 2026 fact pattern fails both Yoshida prongs , no declared emergency process was followed, and current BoP conditions reflect structural trade deficits rather than acute payments shortfalls. From trading partners' perspective, the United States has deployed ever more novel statutory vehicles to sustain tariff policy after each one fails judicial review, degrading US credibility in ongoing trade negotiations.