At 12:01 a.m. Eastern tonight, something that hasn't happened in modern US trade history will occur: a broad-based import tax will simply expire — not because anyone negotiated it away, not because a court struck it down, but because the law that authorized it was always designed to self-destruct.
Section 122 of the Trade Act of 1974 is genuinely unusual. Congress wrote it in the Nixon era for balance-of-payments emergencies, and it comes with a built-in fuse: 150 days, no extensions, no presidential workarounds. Once the clock runs out, the tariff is dead unless Congress votes to resurrect it.
But the expiring surcharge is only one part of the duty bill your imports actually face. For most importers, the more important question isn't "does Section 122 go away" — it's "what's left on the tab after it does, and what's about to be added."
The Chain of Events That Got Us Here
On February 20, 2026, the US Supreme Court ruled 6–3 in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act — the legal basis for every "reciprocal" and "fentanyl" tariff imposed since April 2025 — does not authorize the President to levy tariffs. Two days later, CBP stopped collecting IEEPA duties. The tariffs that had covered roughly $3.3 trillion in annual imports vanished overnight.
The administration didn't wait. Within hours of the ruling, President Trump signed Proclamation 11012, pivoting to Section 122 — a statute that, unlike IEEPA, explicitly authorizes import surcharges. The catch: it caps them at 15% and 150 days. The new tariff — a uniform 10% ad valorem on most imports — took effect February 24, 2026.
That was 150 days ago. Today is day 150.
The Hard Math: What Disappears, What Doesn't Move
If you import, your duty bill probably has more than one layer. Most importers we talk to are paying three or four different charges and calling the total "the tariff." The Section 122 expiration peels away exactly one layer. The others stay put.
| Duty Layer | Legal Basis | Current Rate | Status After July 24 |
|---|---|---|---|
| MFN (Most-Favored Nation) | HTSUS Column 1 General | 0–38% depending on HS code | Unchanged — permanent |
| Section 122 Global Surcharge | Trade Act of 1974 §122 | 10% on most imports | Expires at 12:01 a.m. ET |
| Section 232 Steel | Trade Expansion Act 1962 | 25% (50% on Chinese steel) | Unchanged — no sunset |
| Section 232 Aluminum | Trade Expansion Act 1962 | 10% | Unchanged — no sunset |
| Section 232 Autos & Parts | Trade Expansion Act 1962 | 25% on passenger vehicles | Unchanged — no sunset |
| Section 301 China List 1 | Trade Act of 1974 §301 | 25% (machinery, electronics) | Unchanged — no sunset |
| Section 301 China List 3 | Trade Act of 1974 §301 | 25% (furniture, plastics) | Unchanged — no sunset |
| Section 301 China List 4A | Trade Act of 1974 §301 | 7.5% (apparel, footwear) | Unchanged — no sunset |
| AD/CVD Orders | Tariff Act of 1930 | 0–216% (product/factory specific) | Unchanged — separate proceeding |
| MPF (Merchandise Processing Fee) | 19 USC §58c | 0.3464% (min $33.58, max $651.50) | Unchanged — statutory fee |
| HMF (Harbor Maintenance Fee) | 26 USC §4461 | 0.125% on seaborne cargo | Unchanged — statutory fee |
Here's the practical takeaway: if you import Chinese furniture, the Section 122 expiration saves you 10% — but Section 301 at 25% plus MFN at ~8% plus a potential AD order at up to 216% (depending on your factory) still apply. If you import French wine, you go from MFN + 10% to just MFN, a genuine 10-point reduction. The real-world impact varies enormously by product and origin.
The CAPE Refund: Getting Your IEEPA Money Back
When the Supreme Court voided IEEPA tariffs in February, CBP didn't automatically mail checks to every importer who'd paid them. Instead, the agency set up the Court-Action Payment of Estimated duties process — CAPE — which requires importers to actively file for refunds on entries where IEEPA duties were assessed.
The mechanics are straightforward but time-sensitive. You file a CAPE request with CBP, which suspends liquidation on the flagged entries while the legal situation resolves. If your entries have already liquidated, you file a formal protest within 180 days of liquidation. Miss that window and the money is gone.
A similar dynamic may apply to Section 122 duties. On May 7, 2026, the Court of International Trade ruled Section 122 invalid for three importer plaintiffs — a narrow ruling, but one the government has appealed. If that appeal fails, the ruling could expand. Importers who paid the Section 122 surcharge should talk to their customs attorney about protective filing now, not after the tariff expires.
What Replaces Section 122: The Section 301 Pivot
The administration has been preparing for this deadline for months. In March 2026, USTR opened two enormous Section 301 investigations:
The first, targeting 60 countries, alleges that foreign exporters benefit from forced labor in their supply chains. Proposed duties: 10%–12.5%. The second, naming 16 trading partners including China, the EU, Japan, South Korea, and Vietnam, focuses on industrial overproduction that disadvantages US manufacturers.
Section 301 has no 150-day fuse. Tariffs imposed under it last four years (renewable), have no rate cap, and can be tailored by country and product — a far more flexible weapon than Section 122's blunt 10% uniform surcharge. If USTR moves fast — and the administration has every incentive to do so — replacement duties could be announced within days or weeks of the Section 122 expiration. There might be a brief gap where no surcharge applies. There might not be.
The uncertainty is the point. USTR wants foreign exporters to negotiate, and the threat of higher, permanent, country-specific tariffs is the leverage.
| Section 122 (Expiring) | Section 301 (Proposed Replacement) |
|---|---|
| 10% uniform on nearly all imports | 10%–12.5% proposed, could be higher for some countries |
| 150-day hard limit — cannot be extended | 4-year term, renewable — no time cap in practice |
| Must be uniform across all countries | Country-specific and product-specific rates allowed |
| No public hearing requirement | Requires notice, comment, and hearings (slower to impose) |
| Struck down by CIT for 3 plaintiffs (on appeal) | Legally tested and upheld since 2018 |
| Exempts USMCA, energy, pharma, certain electronics | Exemption scope TBD — likely narrower |
Three Things Importers Should Do Right Now
First, look at your last three customs entries and separate the duty line items. If you can't name which percentage on your 7501 is MFN vs Section 301 vs Section 122 vs Section 232, you don't actually know what you'll be paying next week. Your broker can pull this for you in ten minutes — ask for a duty-breakdown report by entry.
Second, file CAPE protective claims on any unliquidated entries that paid Section 122 or IEEPA duties. This is not a theoretical exercise. The CIT has already signaled that Section 122 has legal vulnerabilities. Even if the current appeal upholds the tariff, you lose nothing by filing — it preserves your place in line if the courts eventually order refunds.
Third, model two scenarios for the second half of 2026. Scenario A: Section 122 expires, no immediate replacement, your duty bill drops by 10% on non-China/non-232 goods. Scenario B: USTR announces Section 301 duties at 12.5% within 30 days on your source countries, and your effective rate goes up 2.5 points from where it is today. If your margins can't absorb scenario B, talk to your suppliers now about who bears the tariff risk.
None of this replaces talking to a customs attorney — the CAPE process and Section 301 country lists are fact-specific. But knowing which numbers on your 7501 are permanent, which are about to disappear, and which are about to be replaced is something you can do this afternoon.
Frequently Asked Questions
Which countries benefit most from the Section 122 expiration?
Countries whose exports to the US face few other tariff layers. EU nations (France, Germany, Italy) gain the full 10-point reduction on goods not covered by Section 232. UK, Japan, South Korea, and Australia similarly see a clean 10% cut on most products. Countries already subject to Section 301 (China) or Section 232 (steel/aluminum from any origin) get partial relief — the 10% surcharge disappears but the underlying targeted tariffs remain. Vietnam, India, and other "alternative sourcing" countries benefit significantly since they have few other US tariffs.
Could Congress extend Section 122?
Technically yes. Politically, almost certainly not. With midterm elections on November 3, 2026, and voter discontent over living costs, neither party is eager to vote for a tax on imported goods. The administration hasn't asked Congress for an extension — it's betting on Section 301 as the permanent replacement. One wild card: if USTR's Section 301 investigations aren't ready by July 24 and imports surge during a tariff gap, Congressional Republicans might face pressure to act. But the base case among trade attorneys is that Section 122 dies on schedule.
How do Section 122 and Section 301 interact with de minimis?
Section 122 does not change de minimis thresholds — the $800 daily limit for Section 321 entries remains (though it has been suspended globally since August 2025 and the suspension was made indefinite in June 2026). If de minimis is eventually restored, the Section 122 expiration is irrelevant for sub-$800 shipments since they never paid duty anyway. For Section 301 replacements, any new tariffs would likewise only apply above whatever de minimis threshold is in effect at that time.
Where can I track the USTR Section 301 investigations?
The two active investigations are docketed at regulations.gov under USTR-2026-0007 (forced labor, 60 countries) and USTR-2026-0009 (industrial overproduction, 16 countries). Public comments are open. The Federal Register notices include proposed country lists and duty rates. CBP's CROSS database and the DutyCalc rate updates page track implementation as it happens.
This page was last updated on July 24, 2026, the final day of the Section 122 150-day window. It reflects the CIT's May 7, 2026 ruling (HMTX Industries v. United States), USTR's March 2026 investigation notices, and CBP's CAPE guidance as of CSMS #62583941. Tariff rates and legal status change rapidly — verify against official sources before making entry decisions.
Keep reading. The Duty Layers Stack breaks down MFN × 301 × AD/CVD × fees into a single-cost comparison. Our Section 301 guide covers the China tariff architecture that remains in place. And if you need to model specific landed-cost scenarios, the landed cost calculator handles multi-layer duty math with your actual numbers.