On Wednesday, the Court of International Trade issued a direct instruction to Customs and Border Protection: liquidate unprocessed entries and reliquidate processed-but-not-finalized entries "without regard" to the now-defunct IEEPA tariffs. For trade compliance engineering teams, this ruling triggers immediate questions about entry processing workflows, rate table updates, and refund tracking logic.
The CBP liquidation order follows the Supreme Court's invalidation of tariffs President Trump had imposed under the International Emergency Economic Powers Act. Within days of that ruling, the administration pivoted to Section 122 of the Trade Act of 1974 to implement a 10% global surcharge on most U.S. imports. Treasury Secretary Scott Bessent indicated this rate could increase to the statutory maximum of 15% imminently—a change he suggested could arrive "sometime this week."
Key Rate Parameters: Section 122 authorizes tariffs up to 15% for a maximum of 150 days. Current rate: 10%. Systems should be architected to handle rate escalation without manual intervention.
A lawsuit filed Thursday by more than 20 states—including New York, California, and Minnesota—challenges the Section 122 tariffs in the Court of International Trade. The plaintiffs argue Trump has not met the statutory threshold, which requires addressing balance of payment deficits rather than trade deficits. The suit also contests the statute's applicability given its origins in a fixed-rate currency exchange system replaced by floating-rate methodology in 1976.
USMCA Exemption Logic Required: USMCA-compliant goods are exempt from the 10% Section 122 tariff. Entry processing systems must implement conditional logic to check USMCA eligibility before applying the surcharge. This exemption introduces complexity that the lawsuit argues violates Section 122's mandate for "broad and uniform application."
For compliance teams managing HTS rate caches, the current environment demands careful version control. IEEPA tariff rates must be flagged as invalidated for reliquidation purposes, while Section 122 rates require a distinct data structure that accounts for: the 150-day statutory limit, potential escalation from 10% to 15%, and USMCA exemption conditions. Rate retrieval APIs should return metadata indicating which tariff authority applies to each duty calculation.
Gregory Husisian, a partner at Foley & Lardner, noted that the Section 122 legal challenge represents "a closer call" than the IEEPA case, since IEEPA "does not even mention tariffs as a potential remedy" while Section 122 explicitly authorizes them. This suggests the 10% global tariff may survive judicial review even as the states pursue refunds for entries already processed.
The reliquidation order creates a discrete processing requirement: systems must identify entries subject to IEEPA tariffs that were processed but not finalized, calculate refund amounts, and track CBP's reliquidation timeline. Simultaneously, new entries must apply Section 122 rates with USMCA exemption checks—a dual-track compliance challenge that requires accurate, up-to-date HTS data.
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