On May 7, 2026, the U.S. Court of International Trade ruled that the additional 10% tariff imposed by the U.S. government under Section 122 of the Trade Act of 1974 was applied in a manner inconsistent with the legal authorization provided by the statute.
The measure had been adopted after the U.S. Supreme Court deemed unlawful the broad tariff package previously imposed under the International Emergency Economic Powers Act (IEEPA). Nevertheless, on February 26, 2026, the Trump administration once again imposed additional tariffs on imports based on Section 122, which allows temporary measures in specific situations involving balance-of-payments concerns.
In its most recent decision, issued on May 7, 2026, the Court of International Trade held that the government relied on an overly broad interpretation of the balance-of-payments concept. In particular, the Court emphasized that a trade deficit does not necessarily constitute a balance-of-payments problem, which is a requirement under Section 122.
Although this third decision is significant, its effects were limited to the plaintiffs in the case. As a result, other importers or exporters affected by the tariff are not automatically entitled to reimbursement of the amounts paid.
Companies impacted by the additional tariff should remain attentive and assess, on a case-by-case basis, the effects of the decision on their operations. The matter warrants further attention, particularly because the application of Section 122 may be challenged, as the provision is intended to address countries that cause balance-of-payments problems to the United States, which does not appear to be the case for Brazil, given that Brazil maintains a trade deficit with the United States.
The matter may still see further developments, including possible appeals or additional guidance from U.S. authorities. For this reason, companies with affected operations should closely monitor the evolution of the case, remain informed of regulatory developments, and preserve documentation related to imports subject to the tariff.
