The Most Consequential Tariff Moment Since the 1930s
On February 20, 2026, the U.S. Supreme Court issued a ruling that upended the entire foundation of the Trump administration's trade agenda. In a 6-3 decision, the Court held that the International Emergency Economic Powers Act — the 1977 statute President Trump had used to impose sweeping tariffs on virtually every country on earth — does not authorize the president to impose tariffs at all. Within hours, the White House pivoted to a backup authority. Within weeks, it launched the broadest use of Section 301 trade law in modern memory. And now, with Section 122 of the Trade Act of 1974 set to expire on July 24, 2026, American importers are staring down one of the most consequential trade policy transitions in a generation. If your business moves goods across borders, the next few days and months will reshape your duty obligations in ways that demand immediate attention.
How IEEPA Tariffs Were Struck Down
President Trump invoked the 1977 International Emergency Economic Powers Act to impose large tariffs on most of the world's countries, justifying the levies by labeling America's longstanding trade deficits a national emergency. The legal architecture held until it didn't.
In a 6-3 ruling, the Court held that IEEPA does not provide statutory authority for the President to impose tariffs, emphasizing that the Constitution assigns to Congress the power to "lay and collect Taxes, Duties, Imposts and Excises." Applying separation-of-powers principles, the Court reasoned that the authority to impose broad-based tariffs is a matter of "economic and political significance" that requires clear congressional authorization.
All U.S. tariffs imposed by the Trump administration under IEEPA terminated at 12:00 a.m. eastern time on February 24, 2026, following the Supreme Court's decision in Learning Resources, Inc. v. Trump, which found that IEEPA does not grant the president authority to impose tariffs. The legal defeat meant the administration had to send refunds to importers that had paid the levies, and as a result, tariffs went from a windfall to a drain on the Treasury. Revenue from import taxes had peaked at more than $31.4 billion in October 2025.
Section 122: The Emergency Bridge
On February 20, 2026, President Trump issued a Proclamation under Section 122 imposing a 10% "temporary import surcharge" on products of all countries, effective February 24, 2026, for 150 days — until July 24, 2026 — unless modified, terminated, or extended by Congress.
Section 122 empowers the president to impose temporary import surcharges of up to 15% ad valorem for no more than 150 days when "fundamental international payments problems require special import measures." Trump announced on social media that he would raise the rate to 15%, the statutory maximum. By announcing an initial rate of 10%, the administration left itself room to increase tariffs if it needed to ratchet up pressure on a particular trading partner.
The Section 122 tariff that replaced the Supreme Court's invalidated IEEPA tariffs is set to expire July 24, 2026, and the average effective U.S. tariff rate could fall from roughly 13 percent to roughly 7 percent almost overnight if nothing replaces it. Section 122 has also faced its own legal challenge. On May 7, 2026, the Court of International Trade ruled in Oregon v. United States and Burlap and Barrel, Inc. v. United States that the administration exceeded its authority by citing general trade deficits rather than the specific "balance-of-payments deficits" Congress had in mind when it wrote Section 122 in 1974. The court limited its permanent injunction to three named plaintiffs; every other importer remains obligated to pay Section 122 duties unless they file their own case or a higher court grants broader relief.
The Two Section 301 Investigations That Will Define What Comes Next
The administration had a plan from day one. The president made clear that he intended to use the 150-day Section 122 period to initiate investigations under Section 301 of the Trade Act of 1974, which could serve as the basis for additional tariffs that — unlike Section 122 tariffs — are not timebound or capped at a certain percentage.
In March 2026, the Office of the United States Trade Representative launched two parallel Section 301 investigations: one targeting manufacturing overcapacity across 16 countries — including China, the EU, Japan, India, Mexico, and Vietnam — and one targeting forced labor enforcement failures across 60 countries.
The overcapacity investigation covers a broad range of manufacturing sectors, including aluminum, automobiles, batteries, cement, chemicals, electronics, energy goods, glass, machine tools, machinery, non-ferrous metals, paper, plastics, processed food and beverages, robotics, satellites, semiconductors, ships, solar modules, steel, and transportation equipment.
On June 2, 2026, USTR issued its determinations in the forced labor investigations covering 60 economies, finding that all 60 had either failed to impose or failed to effectively enforce a prohibition on the importation of goods produced with forced labor, and determined that this conduct is unreasonable and burdens or restricts U.S. commerce.
USTR proposed additional duties of 10% for economies that impose a forced labor import prohibition and 12.5% for all other economies. USTR likely intends to be ready to impose the tariffs under this action by the time the 10% global Section 122 tariff expires on July 24, 2026.
Why Section 301 Is the More Durable Authority
Understanding why the administration is betting so heavily on Section 301 requires appreciating what makes it fundamentally different from both IEEPA and Section 122.
Section 301 is a targeted, country and sector-specific trade remedy with no statutory expiry date and no rate cap. Section 301 requires a formal USTR investigation before tariffs can be imposed, but once imposed they remain in force indefinitely. The 2018 Section 301 tariffs on Chinese goods are still operative in 2026.
The president has flexibility in how he uses the Section 301 tariffs. Trump can still change them — after clearing procedural hurdles — but he cannot impose or move them up or down on a whim as he often did with the IEEPA tariffs. Uncertainty over Trump's tariff policy has vexed businesses, leaving them hesitant to make investments and decisions because they do not know what the trade rules are going to be. A switch to rule-bound 301 tariffs would mean "there's less uncertainty but not no uncertainty."
This two-stage approach — Section 122 for rapid tariff implementation followed by Section 301 — has enabled the administration to maintain tariff pressure while using the 150-day window to develop longer-term trade measures.
What Tariffs Still Apply Regardless of July 24
Not everything is in play on July 24. Several important duty layers are unaffected by the expiration of Section 122 and are entirely separate from the IEEPA saga.
Section 232 articles — steel, aluminum, and copper articles at 50% and autos at 25% — are unaffected. Section 122 never stacked on the metal content of Section 232 articles, and Section 232 has no sunset. China's existing Section 301 lists ranging from 7.5% to 100% predate 2026 and survive July 24 regardless of what happens to the new investigations.
Section 232 actions are also proceeding in parallel, including 100% duties on patented pharmaceuticals and active pharmaceutical ingredients effective July 31 for larger companies and September 29 for others. This means some importers could face new tariff layers arriving even as others lapse.
Section 122 excluded USMCA-qualifying goods from Canada and Mexico, goods subject to Section 232 tariffs, critical minerals, pharmaceuticals, and certain electronics — exemptions that may carry over into successor Section 301 actions, though the final terms remain subject to the comment and hearing process.
The IEEPA Refund Question Has Not Been Resolved
For importers who paid IEEPA tariffs before February 24, 2026, a separate and critically important question remains open: how and when will those refunds be issued?
Penn Wharton Budget Model projects that reversing the IEEPA tariffs will generate up to $175 billion in refunds. Neither the Supreme Court's decision nor the executive order revoking the IEEPA tariffs addressed refunds, leaving the issue to renewed proceedings before the U.S. Court of International Trade, where importers may need to pursue administrative remedies and litigation amid continued uncertainty.
Companies will need to rapidly model which IEEPA tariffs may be refundable and quantify their opportunity, because any refund process is likely to be highly congested. Customs brokers will be under significant strain, with limited capacity to manage a surge of refund claims across thousands of importers.
Key steps include inventorying and quantifying total IEEPA-related duties paid categorized by liquidation status, mapping Post Summary Correction and protest deadlines to preserve rights, and modeling refund timing under multiple administrative scenarios.
How ASR Can Help
The tariff landscape has never moved faster or in more competing directions at once. The gap between companies that plan proactively and those that react after the fact is measured in real dollars: on your landed cost, on your customs bond sufficiency, and on your ability to claim refunds you are legally entitled to.
ASR WorldWide Express is a licensed freight forwarder with deep experience coordinating U.S. import shipments and working alongside trusted licensed customs broker partners to navigate exactly these kinds of rapidly shifting compliance environments. Whether you need to model duty exposure across multiple sourcing countries, assess how the Section 301 forced labor and overcapacity investigations affect your HTS codes, time your shipment entries around regulatory deadlines, or begin organizing your records for potential IEEPA refund claims, our team is ready to help.
Contact ASR WorldWide Express today at +1 786 373 3003 or email shipping@asrwe.com to speak with a freight specialist about your current import program and what July 24 — and the months that follow — mean for your supply chain.
Important Disclaimer
This article is provided for informational purposes only and reflects publicly available information as of July 18, 2026. Tariff rates, investigation outcomes, legal rulings, and regulatory deadlines are subject to rapid change. Nothing in this article constitutes legal, tax, or customs compliance advice. Importers should consult a licensed customs broker and qualified trade counsel to evaluate their specific situation, assess refund eligibility, and respond to any pending regulatory proceedings.
