Section 122 Reciprocal Tariff Calculator: The 10 Percent Surcharge in 2026
Section 122 of the Trade Act of 1974 was activated February 24 2026 as the statutory replacement for the IEEPA reciprocal program. The operative rate is 10 percent ad valorem per USITC HTS heading 9903.03.01 (the 15 percent statutory ceiling in 19 USC 2132 is not the operative rate). USMCA-qualifying goods exempt. Statutory expiry July 24 2026. The CIT struck the duty down May 7 2026, the Federal Circuit stayed that order May 12 2026, and collection continues pending appeal.
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Open calculatorSection 122 Reciprocal Tariff Calculator: The 10 Percent Surcharge in 2026
Section 122 of the Trade Act of 1974 is the 10 percent ad valorem reciprocal tariff under USITC HTS heading 9903.03.01, active since February 24 2026 as the statutory replacement for the invalidated IEEPA program. USMCA-qualifying goods and certain Annex II carve-outs are exempt; KORUS, USJTA, and other US FTAs are not carved out. Section 232 suppresses Section 122 on the same value layer.
Section 122 of the Trade Act of 1974 was activated by presidential proclamation on February 14 2026 as the statutory replacement for the IEEPA-based reciprocal tariff program after the Supreme Court's V.O.S. Selections ruling held that IEEPA does not authorize ad valorem tariffs. The operative rate under USITC HTS heading 9903.03.01 is 10 percent ad valorem (verified 2026-07-10 via USITC primary source). The 15 percent figure in 19 USC 2132 is the statutory ceiling, not the proclaimed rate.
This guide explains the statutory basis, the verified rate, the carve-outs, the stacking rules with Section 232 and Section 301, the May 2026 CIT ruling and Federal Circuit stay, and worked examples for the major lanes.
Statutory basis
19 USC 2132 (Section 122 of the Trade Act of 1974) authorizes the President to impose import surcharges of up to 15 percent ad valorem, or quantitative restrictions, on goods from any country, for up to 150 days at a time, to deal with "large and serious United States balance-of-payments deficits".
The statute was unused from its 1974 enactment until the February 2026 proclamation. The 2026 invocation responded to the Supreme Court ruling that IEEPA does not authorize ad valorem tariffs, leaving Section 122 as the most readily invokable replacement authority.
Key statutory constraints:
- 15 percent ad valorem statutory ceiling (operative rate under HTS 9903.03.01 is 10 percent).
- 150-day duration ceiling per imposition.
- Applies to "any country" (the proclamation made it flat across all origins, with carve-outs).
- Renewal requires either congressional concurrence or a fresh proclamation cycle.
The actual structure (as proclaimed and amended in February 2026)
| Element | Detail |
|---|---|
| Rate | 10 percent ad valorem (USITC HTS 9903.03.01, verified 2026-07-10) |
| Scope | All imports, regardless of country of origin, except as carved out |
| Effective | February 24 2026 |
| Statutory expiration | July 24 2026 (150 days from effective date) |
| Statutory cap | 15 percent ad valorem (19 USC 2132; operative rate under HTS 9903.03.01 is 10 percent, below the cap) |
| USMCA carve-out | Articles qualifying under USMCA (general note 11 HTSUS) exempt |
| Annex II carve-outs | Certain natural resources, fertilizers, vehicles and parts |
| CAFTA-DR carve-out | Textile and apparel articles under CAFTA-DR exempt |
| Other FTAs | NOT explicitly carved out (KORUS, USJTA, AUSFTA, USSFTA, etc. pay 10 percent) |
| Section 232 anti-stack | Section 122 does not apply to value covered by Section 232 |
The "flat across all countries" design was a deliberate departure from the country-specific rate structure of the prior IEEPA program. The administration's stated reason was the avoidance of bilateral-deal complexity that had bogged down the IEEPA program.
Court of International Trade ruling and Federal Circuit stay
On May 7 2026 the US Court of International Trade held in Oregon v. United States (consolidated with Burlap and Barrel v. United States) that the February 2026 Section 122 proclamation exceeded presidential authority under 19 USC 2132. The court found that the balance-of-payments predicate in the statute could not be satisfied by the proclamation's macroeconomic findings.
On May 12 2026 the Court of Appeals for the Federal Circuit issued an administrative stay pausing the CIT order pending the government's appeal. The practical effect: CBP continues to assess and collect Section 122 on every covered entry. Importers paying now should preserve protest rights and consider filing refund claims contingent on the appeal outcome.
Pending appeal at the Federal Circuit. Possible Supreme Court review thereafter. Track the docket: CAFC Nos. 2026-1571 and 2026-1572.
Stacking with other duty layers
| Layer | Stacks with Section 122? |
|---|---|
| MFN duty | Yes, additive |
| Section 232 steel and aluminum | NO, 232 suppresses 122 on covered value |
| Section 301 China lists | Yes, additive on Chinese origin |
| ADCVD | Yes, additive |
| MPF, HMF | Yes, separate fees |
| Section 201 safeguard (e.g., solar) | Yes, additive |
Worked example: Chinese consumer electronics
100,000 USD of HTS 8517.62 from China, not on Section 232 derivative annex.
| Charge | Rate | Base | Amount (USD) |
|---|---|---|---|
| MFN duty | 0 percent | 100,000 | 0 |
| Section 301 List 4A | 7.5 percent | 100,000 | 7,500 |
| Section 122 | 10 percent | 100,000 | 10,000 |
| MPF | 0.3464 percent | 100,000 | 346.40 |
| Total | 17,846.40 |
Effective rate 17.85 percent. The 10 percent Section 122 stacks additively on the Section 301 layer.
Worked example: Indian pharma intermediate
200,000 USD of HTS 2918.29 from India.
| Charge | Rate | Base | Amount (USD) |
|---|---|---|---|
| MFN duty | 3.7 percent | 200,000 | 7,400 |
| Section 122 | 10 percent | 200,000 | 20,000 |
| MPF | 0.3464 percent (capped) | 200,000 | 614.35 |
| Total | 28,014.35 |
Effective rate 14.01 percent. India is at the 10 percent Section 122 rate, same as every other non-USMCA country.
Worked example: Vietnamese furniture
100,000 USD of HTS 9401.61 from Vietnam.
| Charge | Rate | Base | Amount (USD) |
|---|---|---|---|
| MFN duty | 0 percent | 100,000 | 0 |
| Section 122 | 10 percent | 100,000 | 10,000 |
| MPF | 0.3464 percent | 100,000 | 346.40 |
| Total | 10,346.40 |
Effective rate 10.35 percent. Vietnamese furniture pays the 10 percent Section 122 surcharge.
Worked example: USMCA-qualifying Mexican production
100,000 USD of Mexican-assembled HTS 8504.40 inverters, qualifying under USMCA rule of origin.
| Charge | Rate | Base | Amount (USD) |
|---|---|---|---|
| MFN duty | 0 percent (USMCA) | 100,000 | 0 |
| Section 122 | 0 percent (USMCA exempt per general note 11) | 0 | 0 |
| MPF | 0.3464 percent | 100,000 | 346.40 |
| Total | 346.40 |
Effective rate 0.35 percent. USMCA-qualifying Mexican goods remain the cleanest landed cost path.
CRITICAL: Mexican goods that do NOT qualify under USMCA per-shipment rules pay the 10 percent Section 122. The USMCA exemption is per-shipment qualification dependent, not a country-blanket waiver.
Worked example: Korean machinery (KORUS does NOT exempt 122)
500,000 USD of HTS 8457.10 CNC machining center from Korea, KORUS-qualifying.
| Charge | Rate | Base | Amount (USD) |
|---|---|---|---|
| MFN duty | 0 percent (KORUS) | 500,000 | 0 |
| Section 122 (KORUS NOT carved out) | 10 percent | 500,000 | 50,000 |
| MPF | capped | 500,000 | 614.35 |
| Total | 50,614.35 |
Effective rate 10.12 percent. The KORUS preference still wipes the MFN duty, but Section 122 applies at 10 percent because KORUS is not in the proclamation's carve-out list.
This is a material change from the original IEEPA program (where KORUS was nominally exempt). US importers buying Korean machinery face a 10 percentage point cost increase under Section 122 vs. IEEPA-era treatment.
Worked example: Section 232 anti-stack on steel
500,000 USD of HTS 7208.39 hot-rolled steel coil from India (not USMCA, no FTA preference).
| Charge | Rate | Base | Amount (USD) |
|---|---|---|---|
| MFN duty | 0 percent | 500,000 | 0 |
| Section 232 | 50 percent | 500,000 | 250,000 |
| Section 122 (anti-stack, suppressed by 232) | 0 percent | 0 | 0 |
| MPF | capped | 500,000 | 614.35 |
| HMF | 0.125 percent | 500,000 | 625 |
| Total | 251,239.35 |
Effective rate 50.25 percent. Section 232 absorbs the Section 122 layer on covered steel lines. The proclamation's anti-stack rule prevents double-charging on the same metal value.
What changes July 24 2026
The 150-day statutory window expires July 24 2026. Three possible outcomes:
- Congress extends. A resolution of approval lets Section 122 continue beyond the statutory window. Unlikely given current congressional dynamics but possible.
- President allows expiration and re-imposes. A new proclamation could restart the 150-day clock with a fresh balance-of-payments finding. Likely if the Federal Circuit does not further constrain executive tariff authority.
- Expiration without renewal. The 10 percent reverts to zero for all imports as of July 25 2026. Importers would pay MFN plus Section 232/301/ADCVD as applicable but NOT the Section 122 layer.
Importers planning shipments arriving July 25 2026 or later should model both renewal and lapse scenarios. Contracts with delivery after July 24 2026 should include duty-pass-through language addressing the unknown tariff state.
Refund posture for importers paying now
The Federal Circuit stay means duty is collected today, but the underlying CIT ruling could be reinstated on appeal. To preserve a refund position:
- File timely protests on liquidated entries (180 days from liquidation).
- For unliquidated entries, suspend liquidation requests where eligible.
- Track entry numbers, HTS, dutiable value, and the Section 122 amount paid per entry.
- Coordinate with your customs broker on the litigation tracking docket.
If the government loses at the Federal Circuit (or at the Supreme Court on further review), refunds with interest under 19 USC 1505 are the expected remedy for protested entries.
Drawback eligibility
Section 122 is drawback-eligible under 19 USC 1313 per CBP CSMS guidance. Importers who export merchandise (substitution drawback) or re-export imported merchandise (unused merchandise drawback) can recover 99 percent of Section 122 paid. The TFTEA-modernized drawback framework processes this on the same timeline as other recoverable duties.
How to calculate Section 122 reciprocal duty
- Identify the country of origin and check for a carve-out (USMCA qualifying goods, Annex II natural resources and fertilizers, CAFTA-DR textile and apparel).
- Classify the goods to the 10-digit HTSUS and check chapter 72, 73, 76, and the derivative annex for Section 232 exposure.
- Split the customs value between Section 232 covered portion and the remainder.
- Apply 10 percent Section 122 to the remainder (the anti-stacking rule suppresses Section 122 on the 232-covered portion).
- Apply MFN duty, Section 301 (for Chinese origin), and any AD or CVD deposit additively.
- Add MPF and HMF as fees.
- For refund posture, file timely protests within 180 days of liquidation while the Federal Circuit appeal is pending.
Run your Section 122 entry now
The LandedFees calculator applies the 10 percent Section 122 with USMCA exemption logic, the Section 232 anti-stack rule, and the broader landed cost stack including Section 301 and ADCVD.
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 10 percent 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/
- USTR Section 301 statutory basis 19 USC 2411
- USMCA Annex 4-B rules of origin
Frequently asked questions
What is the Section 122 rate?
10 percent ad valorem on most imports, per USITC HTS heading 9903.03.01 (verified 2026-07-10). Section 122 of the Trade Act of 1974 (19 USC 2132) caps the surcharge at 15 percent ad valorem for up to 150 days per imposition, but the operative rate proclaimed under HTS 9903.03.01 is 10 percent, not the statutory ceiling.
Which goods are exempt?
Articles qualifying under USMCA (general note 11 to the HTSUS) are explicitly exempt. The Annex II carve-outs cover certain natural resources, fertilizers, and certain vehicles and parts. CAFTA-DR textile and apparel are also carved out by a separate provision. KORUS, USJTA, AUSFTA, USSFTA, and other US FTAs are NOT carved out, so goods from those partners pay the 10 percent surcharge despite the FTA preference on MFN duty.
When does it expire?
July 24 2026 is the 150-day anniversary of the February 24 2026 imposition. Section 122 statutorily expires after 150 days unless Congress extends or unless the President allows expiration and re-imposes via a fresh proclamation.
How does Section 122 stack with Section 232 and Section 301?
Section 232 anti-stack: Section 122 is suppressed where Section 232 fires on the same value layer (steel, aluminum, derivatives covered by the 232 measure). Section 301: stacks additively on Chinese-origin Section 301 lines. So Chinese consumer electronics on Section 301 List 4A at 7.5 percent plus Section 122 at 10 percent is 22.5 percent before MFN.
What happened in court?
On May 7 2026 the US Court of International Trade held in Oregon v. United States (consolidated with Burlap and Barrel v. United States) that the February 2026 Section 122 proclamation exceeded presidential authority under 19 USC 2132. On May 12 2026 the Federal Circuit issued an administrative stay of the CIT order pending appeal. CBP is still collecting the duty. Importers paying today should preserve refund claims in case the government loses on the merits.
Can I drawback Section 122?
Yes. Section 122 is drawback-eligible under 19 USC 1313. Importers who export merchandise (or substitute same-kind-and-quality merchandise) can recover 99 percent of Section 122 paid via the standard drawback program.
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