Section 122 Reciprocal Tariff Calculator: The 15 Percent Surcharge in 2026

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 original proclamation set the rate at 10 percent. A February 22 2026 amendment raised the rate to 15 percent (the statutory ceiling) before the February 24 2026 effective date, so the 10 percent rate was never actually collected on any entry.

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 ceiling.
• 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)

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

Worked example: Chinese consumer electronics

100,000 USD of HTS 8517.62 from China, not on Section 232 derivative annex.

Effective rate 22.85 percent. The 15 percent Section 122 stacks additively on the Section 301 layer.

Worked example: Indian pharma intermediate

200,000 USD of HTS 2918.29 from India.

Effective rate 19.01 percent. India is at the 15 percent rate, same as every other non-USMCA country.

Worked example: Vietnamese furniture

100,000 USD of HTS 9401.61 from Vietnam.

Effective rate 15.35 percent. Vietnamese furniture pays the 15 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.

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 15 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.

Effective rate 15.12 percent. The KORUS preference still wipes the MFN duty, but Section 122 applies at 15 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 15 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).

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:

1. Congress extends. A resolution of approval lets Section 122 continue beyond the statutory window. Unlikely given current congressional dynamics but possible.
2. 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.
3. Expiration without renewal. The 15 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.

Run your Section 122 entry now

The LandedFees calculator applies the 15 percent Section 122 with USMCA exemption logic, the Section 232 anti-stack rule, and the broader landed cost stack including Section 301 and ADCVD.

Calculate a Section 122 entry

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