diff --git a/cypress/e2e/permit2.test.ts b/cypress/e2e/permit2.test.ts
index 9ad65c2f9f..d960ce9fd0 100644
--- a/cypress/e2e/permit2.test.ts
+++ b/cypress/e2e/permit2.test.ts
@@ -146,6 +146,26 @@ describe('Permit2', () => {
       cy.contains('Swap success!')
       cy.get(getTestSelector('popups')).contains('Swapped')
     })
+
+    it('swaps USDT with existing permit, and existing and sufficient token approval', () => {
+      cy.hardhat().then(async (hardhat) => {
+        await hardhat.fund(hardhat.wallet, CurrencyAmount.fromRawAmount(USDT, 2e6))
+        await hardhat.mine()
+        await hardhat.approval.setTokenAllowanceForPermit2({ owner: hardhat.wallet, token: USDT }, 1e6)
+        await hardhat.mine()
+        await hardhat.approval.setPermit2Allowance({ owner: hardhat.wallet, token: USDT })
+        await hardhat.mine()
+      })
+      setupInputs(USDT, USDC_MAINNET)
+      cy.get('#swap-currency-input .token-amount-input').clear().type('1')
+      initiateSwap()
+
+      // Verify transaction
+      cy.wait('@eth_sendRawTransaction')
+      cy.hardhat().then((hardhat) => hardhat.mine())
+      cy.contains('Swap success!')
+      cy.get(getTestSelector('popups')).contains('Swapped')
+    })
   })
 
   it('swaps when user has already approved token and permit2', () => {
diff --git a/src/components/swap/ConfirmSwapModal.tsx b/src/components/swap/ConfirmSwapModal.tsx
index bc62f52f77..a5b204a9b7 100644
--- a/src/components/swap/ConfirmSwapModal.tsx
+++ b/src/components/swap/ConfirmSwapModal.tsx
@@ -97,6 +97,7 @@ function useConfirmModalState({
     // See the `approve` function here: https://etherscan.io/address/0xdAC17F958D2ee523a2206206994597C13D831ec7#code
     if (
       allowance.state === AllowanceState.REQUIRED &&
+      allowance.needsSetupApproval &&
       allowance.token.equals(USDT_MAINNET) &&
       allowance.allowedAmount.greaterThan(0)
     ) {