Section 122 Sunset July 24 2026: What Changes for Importers
Section 122 expired on July 24 2026 under the 150-day statutory ceiling. The reciprocal surcharge (announced at 15 percent, collected at 10 percent under HTS 9903.03.01) is gone. Here is the post-sunset US tariff stack, who saves, by how much, and what the pending Federal Circuit appeal means for refunds.
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Open calculatorSection 122 Sunset July 24 2026: What Changes for Importers
Section 122 of the Trade Act of 1974 expired at the close of July 24 2026. The across-the-board surcharge that had stacked on top of every non-USMCA-qualifying import since February 24 2026 is no longer being collected. The rate announced in the February 22 amendment was 15 percent, but HTS subheading 9903.03.01 only ever implemented 10 percent, so 10 percent is what CBP actually collected for the full run. CBP guidance issued July 23 confirmed that entries filed on or after July 25 2026 are processed without the Section 122 line.
This article covers what Section 122 was, why it expired, what the post-sunset US tariff stack looks like, who saves and by how much across five major lanes, the pending Federal Circuit appeal on refunds, and how to model your new landed cost.
What Section 122 was
Section 122 (codified at 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 invoked.
The February 14 2026 proclamation invoked it for the first time, with the rate set at 10 percent. A February 22 2026 amendment purported to raise the announced rate to the statutory 15 percent maximum before the February 24 2026 effective date. However, HTS subheading 9903.03.01 (the operative chapter 99 subheading that CBP actually assesses against) reads "The duty provided in the applicable subheading + 10%" for the entire February 24 to July 23 run. So the 10 percent originally announced is what CBP actually collected on every entry, even though industry advisories and the amendment proclamation talked about 15 percent. Almost every non-USMCA-qualifying import paid the 10 percent layer on top of MFN, Section 301, AD/CVD, MPF, and HMF (anti-stacking prevented overlap with Section 232).
The proclamation ran from February 24 2026 to July 24 2026: five months, roughly 150 days of collection on essentially every container entering the United States.
What it cost importers
A rough order of magnitude. US merchandise imports in 2025 ran about 3.2 trillion USD on a CIF basis. Subtracting USMCA-qualifying flows from Mexico and Canada (roughly 600 billion USD) and the Annex II carve-outs (call it another 100 billion USD), the dutiable base for Section 122 was somewhere near 2.5 trillion USD annualized. Five months at the actually-collected 10 percent on 2.5 trillion equals on the order of 100 billion USD in duty collected over the life of the proclamation. (Had the announced 15 percent rate been implemented in the HTS, the number would have been closer to 150 billion USD.) The number is back-of-envelope, but it puts the scale in context.
For a single importer the cost was direct: 10 percent on every shipment, paid at entry, hard to pass through fully to customers in the short run.
Why it expired
Section 122(c) caps any presidential action under the statute at 150 days. From February 24 2026 the clock ran out July 24 2026. The statute reads:
"the President may proclaim, for a period not exceeding 150 days... a temporary import surcharge, not to exceed 15 percent ad valorem..."
The 150-day ceiling is not extendable by the President. Only Congress can extend the duration (and only by passing implementing legislation). Three paths existed to keep the surcharge alive past July 24:
- Congress passes implementing legislation extending the authority.
- The President invokes a different statutory authority (Section 232, Section 201, IEEPA) to maintain an equivalent layer under a different legal hook.
- The President issues a fresh Section 122 proclamation with a new balance-of-payments finding, restarting the 150-day clock.
None of these happened. The Senate Finance Committee held hearings in May and June but never reported out a bill. The House Ways and Means Committee did not introduce companion legislation. The administration did not issue a fresh proclamation. The pending Federal Circuit appeal in Oregon v. United States likely chilled fresh executive action, since the underlying authority was already under judicial challenge.
So at midnight July 24 to 25, the surcharge lapsed by operation of law.
What the post-sunset US tariff stack looks like
The full list of US import duty layers as of July 25 2026:
| Layer | Authority | Scope | Typical rate |
|---|---|---|---|
| MFN duty | HTSUS | All imports unless FTA-qualifying | 0 to 35 percent, varies by HTS |
| Section 301 China | 19 USC 2411 | China-origin only | 7.5 to 100 percent by list |
| Section 232 steel | 19 USC 1862 | Steel and steel derivatives | 50 percent on full value |
| Section 232 aluminum | 19 USC 1862 | Aluminum and aluminum derivatives | 50 percent on full value |
| AD/CVD | 19 USC 1671/1673 | Specific producers/products by order | Variable, often 50 percent plus |
| MPF | 19 USC 58c | Formal entries | 0.3464 percent capped at 614.35 USD |
| HMF | 26 USC 4461 | Sea cargo | 0.125 percent uncapped |
| De minimis suspension | EO February 2026 | All entries over 800 USD | Removed exemption for low-value parcels |
| Fentanyl tariff | IEEPA narrow basis | Mexico and Canada non-USMCA | 25 percent (unaffected by sunset) |
What is no longer in the stack:
- Section 122 reciprocal tariff (gone July 25 2026).
- IEEPA-based reciprocal tariffs (struck down by SCOTUS February 14 2026, never reinstated).
Who saves and by how much
Worked examples across five lanes, all at 200,000 USD entered value, all CIF terms.
China to USA: HTS 8517.62 smart-home electronics
| Layer | Rate | Pre-sunset amount (USD) | Post-sunset amount (USD) |
|---|---|---|---|
| MFN duty | 0 percent | 0 | 0 |
| Section 301 List 4A | 7.5 percent | 15,000 | 15,000 |
| Section 122 (collected under HTS 9903.03.01) | 10 percent | 20,000 | 0 |
| MPF | 0.3464 percent | 614.35 (capped) | 614.35 (capped) |
| HMF | 0.125 percent | 250 | 250 |
| Total | 35,864.35 | 15,864.35 |
Net saving: 20,000 USD per 200,000 USD shipment, exactly the Section 122 line item as actually collected. Effective rate drops from 17.9 percent to 7.9 percent.
Vietnam to USA: HTS 9401 furniture
| Layer | Rate | Pre-sunset amount (USD) | Post-sunset amount (USD) |
|---|---|---|---|
| MFN duty | 0 percent | 0 | 0 |
| Section 301 | n/a | 0 | 0 |
| Section 122 (collected under HTS 9903.03.01) | 10 percent | 20,000 | 0 |
| MPF | 0.3464 percent | 614.35 (capped) | 614.35 (capped) |
| HMF | 0.125 percent | 250 | 250 |
| Total | 20,864.35 | 864.35 |
Net saving: 20,000 USD. Effective rate drops from 10.4 percent to 0.4 percent. Vietnam furniture is the cleanest sunset story because there is no other duty layer.
India to USA: HTS 6109 cotton t-shirts
| Layer | Rate | Pre-sunset amount (USD) | Post-sunset amount (USD) |
|---|---|---|---|
| MFN duty | 16.5 percent | 33,000 | 33,000 |
| Section 122 (collected under HTS 9903.03.01) | 10 percent | 20,000 | 0 |
| MPF | 0.3464 percent | 614.35 (capped) | 614.35 (capped) |
| HMF | 0.125 percent | 250 | 250 |
| Total | 53,864.35 | 33,864.35 |
Net saving: 20,000 USD. Effective rate drops from 26.9 percent to 16.9 percent. The MFN line on apparel is high, so the post-sunset stack is still meaningful but Section 122 was the swing factor.
Germany to USA: HTS 7208 hot-rolled steel coil
| Layer | Rate | Pre-sunset amount (USD) | Post-sunset amount (USD) |
|---|---|---|---|
| MFN duty | 0 percent | 0 | 0 |
| Section 232 steel | 50 percent | 100,000 | 100,000 |
| Section 122 | n/a (anti-stacking with 232) | 0 | 0 |
| MPF | 0.3464 percent | 614.35 (capped) | 614.35 (capped) |
| HMF | 0.125 percent | 250 | 250 |
| Total | 100,864.35 | 100,864.35 |
Net saving: zero. German steel was already exempt from Section 122 under the anti-stacking rule because the entire value was covered by Section 232. The post-sunset stack is identical. Importers of 232-covered goods saw no benefit from the sunset.
Mexico to USA: HTS 8703 USMCA-qualifying passenger vehicle
| Layer | Rate | Pre-sunset amount (USD) | Post-sunset amount (USD) |
|---|---|---|---|
| MFN duty | 0 percent (USMCA) | 0 | 0 |
| Section 122 | 0 (USMCA exempt) | 0 | 0 |
| MPF | 0.3464 percent | 614.35 (capped) | 614.35 (capped) |
| HMF | 0 (land entry) | 0 | 0 |
| Total | 614.35 | 614.35 |
Net saving: zero. USMCA-qualifying flows were already exempt from Section 122 throughout the proclamation life. The sunset does not move the needle for USMCA-compliant shipments.
The lanes that benefit most from the sunset: Vietnam, India, China non-232 product, and any non-USMCA, non-232 origin. The lanes that see no change: USMCA-qualifying flows, Section 232-covered steel and aluminum, Mexico/Canada fentanyl-tariff scope (separate IEEPA basis still in force on non-USMCA-qualifying entries from those two countries).
The pending Federal Circuit appeal
Oregon v. United States (consolidated with Burlap and Barrel v. United States) sits on appeal at the Federal Circuit. The May 7 2026 CIT ruling (2-1, divided) held Section 122 was unlawfully invoked. The May 12 2026 Federal Circuit administrative stay kept collection in place pending appeal. Briefing on the government's stay motion completed in late May. As of the sunset date, the Federal Circuit had not issued a merits decision.
Two outcome scenarios matter for refunds:
Scenario A: Federal Circuit upholds CIT (Section 122 was unlawful). Importers who paid Section 122 between February 24 and July 24 may be eligible for refunds via the standard channels (CBP protest under 19 USC 1514 within 180 days of liquidation, post-summary correction within 270 days of entry, or duty drawback for re-exported merchandise). Total exposure to the Treasury is on the order of 100 billion USD (based on the 10 percent actually collected, not the 15 percent that was announced) if every importer files and prevails. The political and operational pressure on CBP would be significant.
Scenario B: Federal Circuit reverses CIT (Section 122 was lawful). The duty already paid stays paid. The sunset still happened, so no future collection, but the pre-sunset 100 billion USD stays in the Treasury. No refund claims on the merits.
A Supreme Court appeal is possible after either outcome. The two-year protest window means importers who paid Section 122 in February 2026 have until roughly August 2027 to file a protective protest. Earlier entries have correspondingly earlier deadlines.
See our Section 122 refund eligibility guide for the filing mechanics and a worked example.
What to do now
1. Update your landed-cost model. Remove the Section 122 line (10 percent as actually collected under HTS 9903.03.01) from any cost-of-goods calculation for entries on or after July 25 2026. Run the new totals through your pricing.
2. Preserve protest rights on every Section 122 entry paid between February 24 and July 24. Track liquidation dates. File protective protests within 180 days where the entry has liquidated. File post-summary corrections within 270 days where it has not.
3. Audit your broker's classification on the chapter 99 Section 122 line. Verify the parallel-line reporting on Form 7501 was correct for the surcharge period. Errors here matter for refund eligibility under scenario A.
4. Reprice your customer contracts. If you had duty pass-through clauses that captured Section 122, the contract terms now under-capture the duty stack (because 122 is gone) or over-capture (if the clause reads literally). Review with counsel.
5. Watch for a fresh proclamation or congressional action. The administration may attempt a new Section 122 invocation, or pivot to a Section 232 expansion on a new product list, or to a Section 201 safeguard. Each move would reactivate a similar duty layer under a different authority.
6. Reassess origin and routing. Some China-to-Vietnam routing decisions made under the Section 122 + 301 stack are now less compelling under the 301-only stack. Recalculate before extending sourcing contracts.
Model your post-sunset duty stack
The LandedFees calculator dropped the Section 122 line automatically on July 25 2026 for entries dated July 25 or later. Saved calculations from the pre-sunset period preserve the historical 10 percent line (the rate CBP actually assessed under HTS 9903.03.01) for audit trail purposes. New calculations show the post-sunset stack with the 122 line removed.
Related guides
- Section 122 Refund Eligibility 2026: Protest and PSC Filing Mechanics
- What is Section 122? The 2026 Reciprocal Tariff in the Past Tense
- 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: Vietnam to USA (post-sunset edition)
- 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
- 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/
- Gibson Dunn, "Section 122 global tariffs invalidated by the Court of International Trade": https://www.gibsondunn.com/section-122-global-tariffs-invalidated-by-the-court-of-international-trade-ruling-and-next-steps/
- CBP CSMS post-sunset implementation guidance (July 23 2026): https://content.govdelivery.com/accounts/USDHSCBP
Frequently asked questions
Did Section 122 actually expire?
Yes. The February 24 2026 proclamation invoked Section 122 of the Trade Act of 1974, which imposes a hard 150-day statutory ceiling on any presidential surcharge action. That window closed at the end of July 24 2026. CBP stopped collecting the surcharge on entries filed July 25 2026 and later. Note: while the February 22 amendment announced a 15 percent rate, HTS subheading 9903.03.01 only ever implemented 10 percent, and that 10 percent is what CBP actually collected from February 24 through July 23. No congressional extension passed before the deadline, and no fresh proclamation was issued.
What replaces Section 122?
Nothing replaces it as a flat across-the-board duty layer. The post-sunset stack reverts to MFN under the HTSUS, Section 301 (still in force on China at the existing list rates), Section 232 (50 percent on steel and aluminum derivatives), AD/CVD orders where they apply, the suspended de minimis treatment, plus MPF and HMF. The 10 percent flat layer that was on top of all of that from February 24 (announced as 15 percent, collected at 10 percent under HTS 9903.03.01) is gone.
How much do importers save?
Roughly 10 percent of customs value on every non-USMCA-qualifying shipment (the rate that CBP actually collected under HTS 9903.03.01, not the 15 percent that was announced but never implemented). A 200,000 USD shipment from Vietnam that was paying 20,000 USD in Section 122 now pays zero on that layer. The other layers (MFN, 301, 232, AD/CVD) are unchanged.
Can I get back the Section 122 I paid between February and July?
Maybe. The Federal Circuit appeal in Oregon v. United States is still pending. If the appeals court upholds the CIT ruling that Section 122 was unlawful from inception, the government would owe refunds via protest, post-summary correction, or drawback channels. If the appeals court reverses, the duty paid stays paid. Preserve protest rights on every Section 122 line by tracking liquidation dates and filing protective protests within 180 days where appropriate.
Will Section 122 come back?
Possible but not automatic. Three paths: (1) Congress passes new tariff legislation establishing a similar framework. (2) The President invokes Section 122 again with a fresh balance-of-payments finding, restarting the 150-day clock. (3) The President pivots to a different authority (Section 232 on new product categories, Section 301 expansion, Section 201 safeguards). As of July 25 2026, none of these has materialized.
What does the post-sunset stack look like for my lane?
Depends on origin and HTS. For China, you still pay MFN plus Section 301 (7.5 to 100 percent depending on list) plus any Section 232 derivative layer. For Vietnam and India, MFN plus any 232 derivative. For Mexico and Canada under USMCA, the duty stack is largely zero. For Germany, MFN plus Section 232 on steel and aluminum. See the worked examples below.
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