US 10% Tariff Illegal but Still Collected: Equipment Sourcing 2026
The Court of International Trade declared the 10% Section 122 global tariff "invalid as contrary to law" on May 7, 2026. CBP did not stop collecting it. The court issued no universal injunction blocking collection. The tariff was already on a 150-day clock that expires July 24, 2026, with the White House threatening to raise it to 15% on the same date. For any construction equipment routing into the US over the next 75 days, the gap between "ruled illegal" and "still charged at the port" is the cost line you actually pay.
What is still in effect on May 9
The 10% Section 122 rate continues to apply to imports from most origins. USMCA-qualifying goods are exempt. CAFTA-DR textile articles are exempt. Goods covered by Section 232 (steel, aluminum, copper, automobiles, lumber, semiconductors, pharmaceuticals) sit outside Section 122 stacking, but those Section 232 rates run 10% to 50% depending on domestic smelting and casting content. CBP launched its CAPE refund functionality on April 20, 2026 with refund timelines projected at 60 to 90 days for IEEPA-related claims. Section 122 refunds are not yet automatic and would need to follow whatever appeal track Justice files next.
US-routed equipment cost lines compared
A telehandler with meaningful steel and aluminum content lands at a stack the May 7 ruling does not touch.
| Cost line | EU brand routed via US | China brand routed via US | China factory-direct to non-US |
|---|---|---|---|
| Section 122 (10%) | Charged today | Charged today | Not applicable |
| Section 232 steel/aluminum | Stacked at 10 to 50% | Stacked at 10 to 50% | Not applicable |
| Section 301 China-origin | 0 | 25% (where applicable) | 0 |
| FOB price band, 17m+ rotating | USD 290-380K | USD 175-230K | USD 150-200K |
| US dealer mark-up | 15-25% | 10-18% | 0 (direct) |
| Year-1 tariff exposure | High flux | Highest (122 + 232 + 301) | None for non-US lanes |
| Lead time (US delivery) | 12-18 weeks | 14-22 weeks | Not applicable |
If your delivery point is not the US, none of the May 7 ruling, the July 24 expiry, or the 15% threat lands on your invoice. Mexico, Brazil, Saudi Arabia, Kenya, Australia, Indonesia: each runs its own tariff regime against ex-China FOB, and most of those regimes have moved more predictably than US policy through the first half of 2026.
What buyers should do now
Short-term project, US delivery before July 24: If your machine clears US customs before 12:01 a.m. ET on July 24, you pay the current 10% Section 122 plus any 232 stacking. Locking the order now protects against the threatened 15% step. If your project can absorb a 60-day push, hold past July 24 and watch whether the appellate process or the expiry date moves the rate.
Long-term fleet planning, 12 to 36 month horizon: US routing now carries policy risk that did not exist in 2024. Even if Section 122 lapses on July 24, Section 232 on metals will not. Map which units must land in the US versus which can stage in Mexico (USMCA-exempt) or ship direct to non-US sites.
Rental fleet, residual-value sensitive: Section 232 metal rates rebuild residual value on US-resident machines while compressing margin on new acquisitions. Running a mixed fleet with USMCA-staged units lowers tariff-line exposure on the new-buy side without giving up resale support.
Large fleet, multi-country project: Run a destination-by-destination landed-cost simulation rather than a single US benchmark. The same telehandler hitting Saudi, Brazil, and Kenya prices differently, and ex-China FOB removes one regulatory variable from the math.
Trade-offs worth stating
US dealer networks for Manitou, JLG, Merlo, and Liebherr offer something tariffs do not eliminate: in-region parts, service certifications, and warranty handling that buyers have used for decades. Routing factory-direct from China bypasses tariff stacking but trades against parts-network depth and brand recognition in resale. The factory-direct path closes that gap when you negotiate a parts kit at order time, lock service training inclusions in writing, and keep audit visibility into the production line. The procurement question is not which brand wins; it is which cost lines and which delivery destinations sit inside your decision envelope.
What to track through August
The 15% Section 122 threat on July 24, the appellate timeline on the May 7 ruling, and any CBP refund guidance for duties collected between February 24 and the eventual resolution date. Each of those moves your year-1 effective rate. If you are sizing a new order now, request a destination-by-destination landed-cost simulation including USMCA staging options and parts-kit negotiation terms. The decision turns on the cost lines that hit your specific lanes, not on the surface-level tariff headline.
