What Was Section 122? The 2026 Reciprocal Tariff in the Past Tense

Section 122 of the Trade Act of 1974 (19 USC 2132) authorized the President to impose a temporary import surcharge of up to 15 percent ad valorem for a maximum of 150 days when "fundamental international payments problems" required special measures. Until 2026 the statute had never been used. The February 14 2026 proclamation invoked it for the first time. The surcharge ran from February 24 2026 to July 24 2026 and lapsed by operation of law at the 150-day statutory ceiling.

This guide describes Section 122 in the past tense: what it was, what it covered, how it stacked on the other tariff regimes, how it ended, and what came next.

For the live post-sunset duty stack, see Section 122 Sunset July 24 2026: What Changes for Importers. For the refund framework if the Federal Circuit upholds the May 2026 CIT ruling, see Section 122 Refund Eligibility 2026.

The legal text

19 USC 2132 read, in relevant part:

"Whenever fundamental international payments problems require special import measures to restrict imports... the President may proclaim, for a period not exceeding 150 days... a temporary import surcharge, not to exceed 15 percent ad valorem, in the form of duties (in addition to those already imposed, if any)... or temporary limitations through the use of quotas, on articles imported into the United States."

Three key constraints:

1. Trigger: a fundamental international payments problem.
2. Cap on rate: 15 percent ad valorem maximum.
3. Cap on duration: 150 days, not extendable by the President alone.

The statute did not require congressional approval to invoke. It did require congressional approval (or a separate statutory authority) to extend beyond 150 days. Congress did not extend. The 150-day clock ran out.

What happened between February and July 2026

A compressed timeline:

Total collection life: 150 days. Total revenue raised: on the order of 100 billion USD (back-of-envelope, based on dutiable base of roughly 2.5 trillion USD annualized at the 10 percent that CBP actually collected for 5 months, not the 15 percent that was announced).

What it covered

Almost every non-exempt import into the United States.

The proclamation made no carve-out for developing-country status. AGOA, GSP (defunct since January 2026), Caribbean Basin Initiative, and Andean Trade Preference Act did not exempt from Section 122.

Exemption categories

The exemptions covered:

• USMCA-qualifying goods under general note 11 to the HTSUS.
• Annex II carve-outs: certain natural resources, fertilizers, and certain vehicles and parts.
• CAFTA-DR textile and apparel under a separate carve-out provision.
• Value covered by Section 232 under the anti-stacking rule.

Importers had to confirm exemption status per HTS line rather than relying on country-level shortcuts.

How it stacked on the other regimes

The anti-stacking rule against Section 232 was the most-litigated point during the proclamation life. Where the entered value was covered by a Section 232 measure, no Section 122 applied to that portion. Where only part of the entered value was 232-covered (steel components in a finished article), Section 122 applied to the non-232 portion only.

The 150-day statutory cap and why it mattered

Section 122(c) imposed a hard 150-day ceiling on any presidential action. From February 24 2026 the clock ran out at the end of July 24 2026. The President could not unilaterally extend.

Three paths existed to keep the surcharge alive past July 24:

1. Congressional extension. Congress could have passed implementing legislation extending the authority. The Senate Finance Committee held hearings in May and June. No bill was reported out. Industry was split: import-competing manufacturers favored extension, retailers, importers, and agricultural exporters favored sunset. Politically the votes did not materialize.

2. A different statutory authority. The President could have invoked Section 232 on new product categories, or Section 201 safeguards, or Section 301 expansion, to keep an equivalent duty layer in place under a different legal hook. The administration did not pivot in time, likely because the pending CIT/CAFC litigation made any new aggressive tariff action legally risky.

3. A fresh Section 122 proclamation. The statute does not bar a second invocation with a new balance-of-payments finding restarting the 150-day clock. Some commentators expected this. As of the July 24 sunset, no fresh proclamation was issued. The pending Oregon v. United States appeal likely chilled fresh executive action on the same statutory authority.

So at midnight July 24 to 25, the surcharge lapsed.

What replaced it

Nothing replaced Section 122 as a flat across-the-board duty layer. The post-sunset US tariff stack reverts to:

• MFN under the HTSUS (varies by HTS line, 0 to 35 percent typical).
• Section 301 on China-origin (7.5 to 100 percent depending on list).
• Section 232 on steel and aluminum derivatives (50 percent).
• AD/CVD orders where they apply.
• MPF (0.3464 percent capped) and HMF (0.125 percent).
• De minimis suspension on parcels over 800 USD (separate executive action, unaffected by sunset).
• Mexico/Canada fentanyl tariff under the narrow IEEPA emergency basis (25 percent on non-USMCA-qualifying entries from those two countries).

For the worked examples of the post-sunset stack across China, Vietnam, India, Germany, and Mexico lanes, see Section 122 Sunset July 24 2026: What Changes for Importers.

The refund picture

The May 7 2026 CIT ruling held Section 122 was unlawful from inception. The Federal Circuit administrative stay kept collection in place through the sunset, but the merits appeal is still pending.

If the Federal Circuit upholds the CIT, importers who paid Section 122 between February 24 and July 24 may be eligible for refunds via CBP protest, post-summary correction, or duty drawback. The framework mirrors the IEEPA refund process from earlier in 2026.

If the Federal Circuit reverses, the duty paid stays paid.

Either way, protective protests filed within 180 days of liquidation preserve the position at low cost. See Section 122 Refund Eligibility 2026 for the filing mechanics, the documentation requirements, and a worked example.

CBP entry handling during the proclamation life

Section 122 was implemented via chapter 99 of the HTSUS. On Form 7501 the importer reported the regular HTS classification on one line and the chapter 99 surcharge on a parallel line. Specific chapter 99 subheadings handled country groupings and steel/aluminum-stacking cases.

ACE (Automated Commercial Environment) accepted the parallel reporting. Most customs brokers updated their software in mid-February 2026 ahead of the February 24 effective date.

Post-sunset, the chapter 99 Section 122 line is no longer assessed on new entries. Historical entries retain the line for audit and refund purposes.

What the experience taught importers

Five takeaways from the Section 122 episode:

1. Statutory ceilings matter. The 150-day cap was unmovable without congressional action. Any tariff regime built on Section 122 alone has a 5-month half-life.

2. Court challenges can take longer than the duty itself. The CIT ruled May 7, the Federal Circuit appealed within 5 days, and the merits decision still has not come out as of the sunset. The duty was collected throughout. Litigation is not a fast-acting hedge.

3. Pre-position protest infrastructure. Importers who had broker relationships and protest templates ready from the IEEPA episode early in the year moved faster on Section 122 refund preservation.

4. USMCA optimization compounded. Importers who had already qualified goods under USMCA escaped Section 122 entirely. The premium on USMCA qualification kept rising through 2026.

5. Diversification of authority is the next risk. The administration may pivot to Section 232 expansion or Section 201 safeguards next. Each authority has its own scope, rate ceiling, and procedural requirements. Importers should map their HTS portfolio against each authority's coverage to understand the exposure.

Related guides

• Section 122 Sunset July 24 2026: What Changes for Importers
• Section 122 Refund Eligibility 2026: How to Claim After the CAFC Ruling
• Section 232 vs 301 vs 122: How US Tariffs Stack in 2026
• IEEPA Refund Eligibility: How to Claim After the SCOTUS Ruling
• Calculate Import Duty: China to USA
• Calculate Import Duty: Mexico to USA
• USMCA Origin Rules: What Qualifies
• Duty Drawback: Are You Owed a Refund?

Citations

• 19 USC 2132 (Section 122 of the Trade Act of 1974): https://www.law.cornell.edu/uscode/text/19/2132
• White and Case, "Trump administration imposes Section 122 tariff plan to replace IEEPA tariffs": https://www.whitecase.com/insight-alert/trump-administration-imposes-10-section-122-tariff-plan-replace-ieepa-tariffs
• Skadden, "US Trade Court strikes down Section 122 tariffs": https://www.skadden.com/insights/publications/2026/05/us-trade-court-strikes-down-section-122-tariffs
• Ward and Smith, "Court of International Trade rejects Section 122 tariff": https://www.wardandsmith.com/article/court-of-international-trade-rejects-10-section-122-tariff-what-businesses-should-know-while-the-appeal-proceeds
• Clark Hill, "Section 122 tariffs ruling": https://www.clarkhill.com/news-events/news/section-122-tariffs-ruling/
• Troutman Pepper Locke, "Federal Circuit hits pause on CIT Section 122 ruling": https://www.troutman.com/insights/federal-circuit-hits-pause-on-cits-section-122-tariff-ruling/
• Holland and Knight, "US Court of International Trade invalidates the Section 122 tariffs": https://www.hklaw.com/en/insights/publications/2026/05/us-court-of-international-trade-invalidates-the-administrations
• Covington, "IEEPA tariffs terminated, replacement Section 122 tariffs take effect": https://www.cov.com/en/news-and-insights/insights/2026/02/ieepa-tariffs-terminated-replacement-section-122-tariffs-take-effect

Run a post-sunset duty calculation in the LandedFees calculator.