Section 122 Tariff Sunset: What Happens When the 10% Surcharge Expires July 24, 2026

TL;DR

1. What Section 122 Actually Is

Section 122 of the Trade Act of 1974, codified at 19 U.S.C. § 2132, grants the President conditional authority to impose an import surcharge, impose quantitative limitations on imports, or both, whenever "fundamental international payments problems require special import measures to restrict imports." The statute is narrowly scoped. Three features define it:

1. The rate is capped at 15 percent ad valorem. The current surcharge is 10 percent, well within that ceiling.
2. The duration is capped at 150 days. After that, the surcharge lapses by operation of law unless Congress passes affirmative legislation to extend it.
3. The trigger is balance of payments, not national security or unfair trade. This is what separates Section 122 from Section 232 (national security) and Section 301 (unfair trade practices).

Section 122 is older than IEEPA by three years and predates most of the modern tariff statutes. It was used only once before 2025 (Nixon's 10 percent surcharge in 1971, which operated under the Trading with the Enemy Act and was later codified in similar form in the Trade Act of 1974). For roughly five decades it sat unused on the books. Its re-activation in late 2025 was the second invocation in the statute's history.

2. Why the 150-Day Cap Is Automatic

The 150-day statutory cap in 19 U.S.C. § 2132(a) is a hard-coded sunset. It runs from the date the surcharge takes effect. Unlike Section 232 or Section 301 tariffs, which can continue indefinitely until the President lifts them, Section 122 surcharges extinguish themselves on day 151 by operation of statute. Congress wrote the cap this way in 1974 precisely because balance of payments crises are temporary by nature, and Congress did not want the executive branch to use emergency balance of payments authority as a vehicle for permanent protectionism.

To extend the surcharge past 150 days, Congress must pass affirmative legislation. A simple executive proclamation cannot do it. As of this writing, no such legislation has been introduced with meaningful traction, which means the operative planning assumption for importers is a clean July 24, 2026 expiration.

That date matters for entry timing. Goods entered for consumption on or after July 25, 2026 will not carry the Section 122 line item. Goods entered on or before July 24, 2026 will, even if they clear CBP processing after the 24th.

3. Why Section 122 Duties Are Not Refundable Under the SCOTUS Ruling

One of the most common points of confusion for importers reviewing their entry summaries is the assumption that the Learning Resources ruling swept away all of the tariffs imposed during the 2025 surge. It did not.

The Supreme Court's holding in Learning Resources, Inc. v. Trump was narrow. The majority struck down only the use of IEEPA (50 U.S.C. §§ 1701 to 1708) as a basis for ad valorem tariffs. The Court explicitly preserved every other statutory tariff authority, including Sections 122, 201, 232, 301, and 338, each of which has its own independent statutory basis. The SCOTUS ruling guide covers the majority opinion in detail.

Section 122 has the clear, text-based authorization that IEEPA lacked. The statute expressly authorizes "the imposition of a temporary import surcharge, not to exceed 15 percent ad valorem," using the word "surcharge" explicitly rather than the ambiguous "regulate" language that tripped up IEEPA. The major questions doctrine does not kick in because Congress gave clear authority to act, and it limited that authority with the 150-day cap. The duty is, legally, exactly what Congress said it could be.

The practical consequence: a Section 122 line item on your entry summary is not refundable under Learning Resources. There is no CAPE claim, no CF-19 protest grounded in the SCOTUS ruling, and no drawback theory tied to the sunset that will recover those duties. The duty you paid stays paid. The only relief available is for the surcharge to end on July 24, 2026 and to not appear on any entry summary thereafter.

Estimate only. Subject to CBP adjudication.

4. How Section 122 Interacted With IEEPA Stacking

Between the date Section 122 took effect in late 2025 and the February 20, 2026 SCOTUS ruling, many importers saw duties stack on a single entry. An entry of, say, Chinese-origin electronics during that window could carry all of:

• Column 1 MFN base duty (Chapter 85 or similar)
• Section 301 List 1 or List 3 surcharge (HTSUS 9903.88.xx)
• IEEPA ad valorem duty (HTSUS 9903.01.xx)
• Section 122 10 percent surcharge (HTSUS 9903.80.xx range)

When Learning Resources vacated the IEEPA component, the three remaining layers stayed in place. The entry now carries Column 1 plus Section 301 plus Section 122, with the Section 122 piece scheduled to drop off on July 24. Use the tariff stacking calculator to model your own entries across the before and after states.

This matters for refund analysis. If an importer looks at their entry summary and sees a total duty number that did not change as much as they expected after the SCOTUS ruling, the explanation is almost always that the non-IEEPA layers (301, 232, 122) were doing significant work. The IEEPA refund only recovers the IEEPA layer. The other layers require different strategies (drawback for 301 and 232 on exports, entry timing for 122, potential reclassification work for Column 1).

5. Reading Your Entry Summary Correctly

The most important practical skill for importers planning around the sunset is reading the HTSUS Chapter 99 subheadings on CBP Form 7501 correctly. The coding tells you which authority each line came from:

When you reconcile your entry summaries for a refund analysis, the first screen is to isolate the 9903.01.xx lines. That is the only bucket in scope for the CAPE portal or a CF-19 protest grounded in the SCOTUS ruling. Everything else, including the 9903.80.xx Section 122 lines, stays out of the refund computation.

A very common error in informal refund estimates circulating in industry forums is to treat all Chapter 99 duties as "Trump tariffs" and lump them together. That is wrong. Each subheading range is a different statute, a different legal history, and a different refund story. The Section 301 answer page has more detail on why 301 duties stay even after the ruling.

6. Planning Entry Timing Around July 24, 2026

For importers with flexibility on release dates, Section 122's hard sunset creates a planning opportunity. Entries for consumption on or after July 25, 2026 do not pay the surcharge. Entries on or before July 24, 2026 do. The question is how to sequence releases through summer 2026.

Factors to weigh:

Cash flow cost of delay. A container sitting in a bonded warehouse or foreign trade zone costs storage and demurrage. Model the carrying cost against the 10 percent duty saving. On a $100,000 customs value entry, the surcharge is $10,000. If delay costs are under $10,000, delay is economic. Over $10,000, it is not.

Foreign trade zone admissions. Goods admitted to an FTZ before July 24 and withdrawn for consumption after July 24 pay the duty rate in effect at withdrawal, not at admission (for non-privileged foreign status goods). This is a common lever to skip the surcharge without disrupting physical supply chains.

Bonded warehouse entries. Similar lever, with different cost structure. Goods held in a customs bonded warehouse under 19 U.S.C. § 1555 can be withdrawn for consumption at any time within five years, paying the rate in effect on the withdrawal date. For importers with existing bonded-warehouse relationships, this is a clean path to sidestep the last weeks of the surcharge.

Transit and ocean timing. For goods already on the water, the practical question is whether the vessel arrives and the entry is filed before or after July 24. Carriers and customs brokers will have contingency lanes for July 2026 arrivals. Talk to your broker now, not the week before.

Section 301 continues regardless. Delaying past July 24 does nothing for Section 301 duties on Chinese-origin goods. Those stay. Section 122 delay tactics only help the 10 percent surcharge layer.

Estimate only. Subject to CBP adjudication.

7. Exclusions, Disqualifications, and Complications

A few importer profiles face additional complications:

UFLPA-detained shipments. Goods detained under the Uyghur Forced Labor Prevention Act do not clear CBP and do not finalize their entry until the Withhold Release Order is cleared. The duty rate at final release date controls. UFLPA detention at or near the sunset can create ambiguity. Importers with UFLPA exposure should not plan around a specific sunset date and should treat the duty rate as uncertain until release.

Antidumping or countervailing duty entries. AD/CVD goods carry their own duty layer on top of everything else. AD/CVD duties are unaffected by Section 122's sunset and unaffected by the SCOTUS ruling. They remain due in full.

Transshipment exposure. If the country-of-origin analysis on your entry is under CBP review or fraud investigation, all duty-rate planning is paused until the origin question is resolved. Transshipment cases must be referred to a customs law firm, not resolved by a broker.

These three categories (UFLPA detention, AD/CVD, and transshipment exposure) automatically disqualify an entry from any clean refund or duty-planning path. Identify them first, separate them out, and handle them through counsel.

8. What Happens Post Sunset

After July 24, 2026, the Section 122 surcharge disappears from entries. What remains on the books depends on the specific good:

• Chinese-origin electronics under Section 301: MFN (Column 1) base duty plus Section 301 List 1 to 4 rate, no IEEPA layer, no Section 122 layer.
• Steel and aluminum under Section 232: MFN base plus the 232 rate (25 percent steel, 10 percent aluminum historically; current rates vary by partner agreement).
• Goods not subject to 301, 232, 201, or AD/CVD: MFN base duty only. This is the cleanest outcome. Most consumer goods from non-China origins fall here.

The Column 1 MFN rate is the durable base. Section 122's sunset is a return to the pre-2025 baseline for goods that never had 301, 232, or 201 exposure. For goods that did, the base duty plus those specific surcharges is what you pay going forward.

Use the Section 122 calculator to model your specific HTS classifications across the pre-sunset and post-sunset states.

9. Action Items for Importers

1. Pull ACE entry summaries for late 2025 through July 24, 2026 and tag Chapter 99 subheading 9903.80.xx lines as Section 122 duty paid.
2. Do not include Section 122 lines in any CAPE claim or CF-19 protest grounded in Learning Resources. Those claims will be rejected and waste filing fees.
3. Model your July 2026 release schedule against the July 24 sunset. Identify any entries with flexible timing.
4. Engage your broker on FTZ or bonded warehouse options for entries on the bubble.
5. Separate AD/CVD, UFLPA, and transshipment entries and route them to customs counsel rather than broker-level planning.
6. Verify Chapter 99 coding. Broker entry coding errors are common in high volume periods and can flip a Section 122 line into a Section 301 line or vice versa on paper.

Tariff Refund Credits is a lead-generation service connecting US importers with licensed customs broker partners operating under 19 CFR 111. We do not file entries or protests ourselves. Our broker partner handles all customs business under 19 USC 1641.

Frequently Asked Questions

Q: Is the Section 122 surcharge refundable after the SCOTUS ruling? No. Section 122 has its own statutory basis at 19 U.S.C. § 2132 with clear tariff-setting language. The Learning Resources decision only struck down IEEPA-based duties. Section 122 duties stay paid.

Q: Can the President extend the surcharge past July 24, 2026 by executive order? No. The 150-day cap is hard-coded in the statute. Extension requires affirmative congressional legislation, not a presidential proclamation.

Q: How do I tell Section 122 duties apart from IEEPA duties on my entry summary? Check the HTSUS Chapter 99 subheading on each line. Section 122 uses the 9903.80.xx range. IEEPA uses 9903.01.xx. Section 301 uses 9903.88.xx. The coding is the authority.

Q: If I admit goods to an FTZ before July 24, when does the duty rate apply? For non-privileged foreign status goods, the duty rate at withdrawal for consumption controls. Admitting before July 24 and withdrawing after July 24 avoids the Section 122 surcharge on those goods. Privileged foreign status locks the rate at admission, which is a different result, so confirm status with your broker.

Q: Does Section 122 apply to goods from all countries? The current surcharge covers a broad set of imports with narrow country and product carve-outs. Check HTSUS Chapter 99 Notes for the exact scope applicable to your HTS classifications.

Q: What happens to Section 301 duties after July 24, 2026? Nothing. Section 301 operates under 19 U.S.C. § 2411 and has no connection to Section 122's sunset. China List 1 to 4 surcharges continue indefinitely.

Next step: Model your exposure with the Section 122 calculator, review the SCOTUS ruling guide, or run a stacked scenario in the tariff stacking calculator.

Reviewed by Licensed Customs Broker Partner (pending name). Last updated April 22, 2026. Educational content only. Refund filings are customs business executed by our partner licensed customs broker under 19 USC 1641.