What is the Section 122 surcharge?
Section 122 of the Trade Act of 1974 authorizes the President to impose temporary import surcharges of up to 15% during balance-of-payments emergencies. On February 24, 2026, a 10% surcharge under this authority took effect, replacing the IEEPA-based tariffs that the Supreme Court struck down four days earlier.
The surcharge applies broadly to most imported goods entering the United States, though certain product categories and existing exemptions carry over from previous trade actions.
How does Section 122 differ from IEEPA tariffs?
The key differences are significant for importers. Section 122 has explicit congressional authorization, making it more legally durable than IEEPA tariffs. However, it is inherently temporary with a maximum duration of 150 days, expiring no later than July 24, 2026. The rate is capped at a uniform 10%, compared to the varying and sometimes much higher rates under IEEPA.
Section 122 surcharges stack on top of existing duties. If your product already carries a 5% MFN duty rate, the total would be 15%. They also stack with Section 232 and Section 301 tariffs where applicable.
What products are covered?
The surcharge applies to nearly all imported goods with some exceptions. Products listed under Annex II of the implementing order retain their existing tariff exclusions. Goods already subject to Section 232 tariffs on steel, aluminum, and semiconductors have specific stacking rules. Certain humanitarian and diplomatic exemptions apply.
How to calculate your new duty rate
Your total duty rate under the current framework is the sum of your base MFN duty rate plus any applicable Section 301 tariffs on Chinese goods plus any applicable Section 232 tariffs on metals and semiconductors plus the 10% Section 122 surcharge.
For example, a product from China with a 3% MFN rate and 7.5% Section 301 rate would now carry a total effective rate of 20.5% (3% + 7.5% + 10%).
What happens when the 150 days expire?
This is the question keeping trade lawyers busy. The surcharge is set to expire on July 24, 2026. The administration could seek to extend or replace it through new legislation, invoke another trade authority, allow it to lapse, or negotiate bilateral trade agreements to replace broad surcharges with targeted measures.
How importers should prepare
Review your tariff exposure immediately and recalculate landed costs. Consider accelerating shipments before the regulatory landscape changes again. Explore duty mitigation strategies such as Foreign Trade Zones, bonded warehousing, and tariff engineering. Work with your customs broker to ensure correct classification and valuation.
Get expert guidance from ASR
Our team monitors tariff changes daily and proactively advises clients. Whether you need a tariff impact assessment, duty mitigation strategy, or customs clearance support, contact us at shipping@asrwe.com or +1 786 373 3003.
