The 10% Section 122 import surcharge expires on July 24, 2026, by statute. The administration cannot extend it without an act of Congress. But duties are not going down. The administration has explicitly stated it intends to replace the surcharge with new tariffs under Section 301 and Section 232 before the expiration date. Here is what is coming, what the three most likely scenarios look like, and how to position your import strategy for each one.
Key Takeaways
The Section 122 surcharge expires on July 24, 2026. This is a statutory 150-day limit that the President cannot extend unilaterally.
Only Congress can extend Section 122 past 150 days. Congressional extension is widely considered unlikely.
The administration has stated publicly that it intends to replace Section 122 with tariffs under Section 301 and Section 232, which have no expiration date and no rate cap.
USTR launched Section 301 investigations into 16 economies on March 11, 2026, with a stated intent to complete them by approximately July 24.
Section 232 investigations into pharmaceuticals, drones, robotics, wind turbines, and other sectors are ongoing and could produce new tariffs at any time.
Two lawsuits challenging the legality of Section 122 are pending at the Court of International Trade, with oral arguments scheduled for April 10, 2026.
Importers should model three scenarios: surcharge expires with no replacement, new Section 301 tariffs take effect, or expanded Section 232 tariffs cover additional product categories.
What Is the Section 122 Tariff?
Section 122 of the Trade Act of 1974 authorizes the President to impose a temporary import surcharge of up to 15% ad valorem for a maximum of 150 days to address "large and serious" U.S. balance-of-payments deficits. It had never been used before February 20, 2026.
The short answer is: Section 122 is a temporary, flat-rate tariff on nearly all imports that was imposed as an emergency replacement after the Supreme Court struck down IEEPA tariffs. It is a bridge measure, not a permanent trade policy.
The current surcharge is 10% ad valorem, applied to goods from all countries, effective February 24, 2026. President Trump announced an intent to raise the rate to 15% (the statutory maximum) on February 21, and Treasury Secretary Bessent confirmed that intent on March 4. However, as of April 3, 2026, no formal proclamation raising the rate to 15% has been issued, and CBP is collecting at the 10% rate.
Key definition: Ad valorem means the tariff is calculated as a percentage of the declared customs value of the goods, not as a flat dollar amount per unit.
Why Can't the President Just Extend It?
Section 122 contains a hard statutory limit of 150 days. The President cannot extend the surcharge unilaterally through executive order, proclamation, or any other mechanism. Extension requires affirmative legislation from Congress, meaning both chambers must vote and the President must sign the bill into law.
Congressional extension is widely considered unlikely. The political dynamics, committee timelines, and legislative calendar make passage of an extension bill within the required window extremely difficult.
However, one theoretical workaround exists. The President could allow the surcharge to expire on July 24, declare a new balance-of-payments emergency, and impose a new 150-day surcharge starting July 25. This would create a de facto perpetual tariff using rolling 150-day windows. Whether this approach would survive legal challenge is uncertain, but it is a scenario importers should not dismiss entirely.
What Is the Administration's Replacement Strategy?
Treasury Secretary Bessent stated on CNBC on March 4, 2026: the administration intends to use the 150-day Section 122 window to complete Section 301 studies and advance Section 232 analyses, with the goal of replacing the surcharge with more durable tariff authority before it expires.
Three replacement pathways are being built simultaneously.
Pathway 1: New Section 301 Tariffs (Country-Specific)
On March 11, 2026, USTR launched two sweeping Section 301 investigations.
Investigation 1: Structural excess capacity. This investigation targets manufacturing practices and policies in 16 economies, including China, the EU, Japan, Korea, Vietnam, India, Taiwan, Mexico, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, and Bangladesh. The focus is on whether these economies maintain trade practices that are unreasonable or discriminatory and that burden U.S. commerce.
Investigation 2: Forced labor enforcement. USTR initiated 60 additional Section 301 investigations targeting economies that have failed to enforce bans on importation of goods produced with forced labor.
The timeline from March 11 to July 24 is 135 days. USTR has publicly pledged to move on an expedited timeline, with the stated intent of completing both investigations by approximately July 24. Section 301 allows country-specific tariffs with no statutory rate cap and no expiration date. Once imposed, Section 301 tariffs remain in effect indefinitely unless the President decides to modify or remove them.
Written public comments are due April 15, 2026. Public hearings are scheduled to begin April 28.
Pathway 2: Expanded Section 232 Tariffs (Product-Specific)
Section 232 tariffs already apply to steel, aluminum, copper, automobiles, auto parts, buses, heavy vehicles, lumber, and semiconductors. Ongoing Section 232 investigations could extend coverage to pharmaceuticals and pharmaceutical ingredients, medical devices and equipment, commercial aircraft, drones and their components, wind turbines and their parts, robotics and industrial machinery, large-scale batteries, and critical minerals.
Each of these investigations has been underway long enough to potentially produce new tariffs in 2026. Section 232 tariffs have no expiration date and have survived extensive legal challenge. The administration views them as the most legally durable form of tariff authority available.
Pathway 3: Legal Challenges and Possible Invalidation
Two lawsuits challenging Section 122 are pending at the Court of International Trade. One was filed by 24 state attorneys general on March 5, 2026. A separate suit was filed by two impacted businesses on March 9. Oral arguments are scheduled for April 10, 2026.
If the court rules to suspend Section 122 duties before July 24, collections could stop immediately (subject to government appeal). If the court upholds the surcharge, it continues through the statutory expiration. Either outcome would shift the tariff landscape within weeks.
What Are the Three Scenarios Every Importer Should Model?
| Scenario | What Happens | Impact on Duty Rates | Probability |
|---|---|---|---|
| A: Section 122 expires, no immediate replacement | The 10% surcharge ends July 24. New Section 301/232 tariffs are not yet ready. Gap of weeks or months with lower duties. | Duty rates drop by 10 percentage points for most imports not covered by Section 232 or 301. | Low to moderate |
B: Section 301 tariffs take effect near July 24
USTR completes investigations on expedited timeline. New country-specific tariffs replace the flat 10% surcharge. Rates vary by country and product.
Some countries see rates higher than 10%. Others see lower rates. China likely faces the steepest new duties.
High
C: Expanded Section 232 tariffs cover new product categories
Commerce Department concludes investigations. New product categories (pharmaceuticals, drones, batteries, etc.) are added to Section 232 coverage at 25% or higher.
Products newly covered by Section 232 face steep rate increases. Products not covered may see temporary relief if Section 122 expires first.
Moderate
The most likely outcome is some combination of B and C. The administration has been explicit that it does not intend to let tariff rates fall when Section 122 expires. The question is whether the replacement tariffs are ready on time, and whether they are higher or lower than the current 10% surcharge for your specific products and origins.
How Should Importers Prepare for July 24?
1. Model All Three Scenarios for Your Top Products
For each of your highest-volume import entries, calculate the total duty under three conditions: Section 122 expires with no replacement (MFN + existing Section 232/301 only), new Section 301 tariffs at estimated rates for your country of origin, and expanded Section 232 coverage for your product category. The spread between these scenarios tells you how much financial exposure you carry into July.
2. Evaluate Bonded Warehouse Timing
If you expect Section 122 to expire without immediate replacement (Scenario A), importing goods into a bonded warehouse now and withdrawing after July 24 avoids the 10% surcharge entirely. Duty in a bonded warehouse is assessed at the rate in effect at the time of withdrawal, not at the time of importation. For a detailed comparison of bonded warehouse and FTZ strategies, see our FTZ vs. bonded warehouse guide.
3. Accelerate or Defer Shipments Based on Your Scenario Analysis
If your scenario modeling shows that replacement tariffs (Section 301 or Section 232) are likely to be higher than 10% for your products, consider accelerating shipments to arrive before July 24 while the known 10% rate still applies. If replacement tariffs are likely to be lower or delayed, consider deferring entries until after expiration.
4. Monitor the April 15 Comment Deadline and April 10 Court Date
The Section 301 investigation comment deadline on April 15 will reveal which product categories and countries are most likely to face new tariffs. The April 10 oral arguments on the Section 122 legal challenges could signal whether the surcharge survives its full 150-day term. Both events will sharpen your scenario analysis significantly.
5. Update Your Pricing and Sourcing Agreements
If your customer contracts or supplier agreements assume a specific tariff rate, review those terms now. A 10 percentage point swing in duty (in either direction) on July 24 will affect your margins, your landed cost, and your competitive position. Agreements that do not account for tariff variability leave you exposed.
6. Prepare for Duty Drawback on Section 122 Payments
CBP has confirmed that the Section 122 surcharge is eligible for duty drawback. If you import goods during the surcharge period and subsequently export them (or products manufactured from them), you can recover up to 99% of the Section 122 duties paid. Identify eligible entries now and begin matching them against export records. For a complete guide to the drawback process, see our duty drawback article.
Will Section 122 Tariffs Be Refunded If the Courts Strike Them Down?
The short answer is: possibly, but the process is uncertain.
The two pending lawsuits challenge whether Section 122 was properly invoked. If the court finds the surcharge unlawful, importers who paid Section 122 duties could be entitled to refunds, similar to the IEEPA refund process now underway. However, no court has yet ruled on the merits, and even a favorable ruling would require CBP to develop a refund mechanism.
Importers should consider tracking all Section 122 duty payments separately in their records. If refunds become available, having organized, entry-level data on surcharge payments will accelerate the claims process. Filing protests on liquidated entries to preserve refund rights is also a prudent step, particularly for high-value entries.
Frequently Asked Questions
When does the Section 122 tariff expire?
The Section 122 surcharge expires on July 24, 2026. This is a statutory 150-day limit that began on February 24, 2026.
Can the President extend Section 122 without Congress?
No. The 150-day limit is written into the statute. Only an act of Congress can extend the surcharge beyond July 24, 2026.
What is the current Section 122 tariff rate?
The rate is 10% ad valorem as of April 3, 2026. President Trump announced an intent to raise it to 15% (the statutory maximum), but no formal proclamation implementing the increase has been issued.
What will replace Section 122 after it expires?
The administration has stated it intends to replace the surcharge with new tariffs under Section 301 (country-specific) and Section 232 (product-specific). USTR launched Section 301 investigations into 16 economies on March 11, 2026, with the goal of completing them by approximately July 24.
Will tariffs go down after July 24?
Not necessarily. The administration has explicitly stated that tariff rates are intended to remain at current levels or higher. The replacement tariffs under Section 301 and Section 232 may produce rates above 10% for some countries and products, while others may see temporary relief during any gap between Section 122 expiration and new tariff implementation.
Are there lawsuits challenging Section 122?
Yes. Two lawsuits are pending at the Court of International Trade. One was filed by 24 state attorneys general on March 5, 2026. A separate suit was filed by two businesses on March 9. Oral arguments are scheduled for April 10, 2026.
Can I avoid the Section 122 surcharge using a bonded warehouse?
Yes. Duty in a bonded warehouse is assessed at the rate in effect at the time of withdrawal, not importation. If you import goods now and withdraw them after July 24, the surcharge does not apply (assuming it has expired by then). See our FTZ vs. bonded warehouse guide for details.
Is the Section 122 surcharge eligible for duty drawback?
Yes. CBP has confirmed that Section 122 duties qualify for drawback. Importers who export goods on which the surcharge was paid can recover up to 99%. See our duty drawback guide for the full process.
Which products are exempt from Section 122?
Exempt categories include goods subject to Section 232 tariffs (steel, aluminum, copper, autos, semiconductors, lumber), USMCA-qualifying goods from Canada and Mexico, CAFTA-DR qualifying textiles, critical minerals, energy products, pharmaceuticals, certain agricultural products, and civil aircraft. The full list is in Annexes I and II of the February 20, 2026, proclamation.
What should I do before April 15?
The Section 301 investigation public comment deadline is April 15, 2026. Review the scope of both investigations (structural excess capacity and forced labor enforcement) to determine whether your products, countries of origin, or supply chains are implicated. Consider submitting comments through the USTR electronic portal, either directly or through an industry association.
How do I model the financial impact of each scenario?
For each of your top 20 import entries by duty value, calculate total landed cost under three conditions: current rates (MFN + Section 301/232 + Section 122), rates without Section 122 (MFN + Section 301/232 only), and rates with new Section 301 tariffs at estimated country-specific levels. The difference between these numbers is your exposure window. For help building these models, consult with a licensed customs broker experienced in tariff analysis.
This guide reflects U.S. tariff policy, pending investigations, and litigation status as of April 3, 2026. The Section 122 surcharge, Section 301 investigations, and Section 232 investigations are all subject to change through executive action, court rulings, and congressional legislation. Importers should monitor USTR Federal Register notices, CBP CSMS messages, and CIT docket activity. For related strategies, see our guides on tariff stacking, duty drawback, and FTZ vs. bonded warehouse.