Section 122 Surcharge Takes Effect - and the 150-Day Clock Starts

A new tariff under a different statute

At 12:01 a.m. Eastern today, a new 10% import surcharge took effect under Section 122 of the Trade Act of 1974. The administration announced the surcharge on the same day the Supreme Court rejected its use of IEEPA.

As a legal matter, this is not a continuation of the IEEPA program. Section 122 is an express tariff authority, but it is a narrow one. It permits temporary import measures only when specified international-payments conditions exist.

The clock matters

Section 122 permits a surcharge for no more than 150 days unless Congress extends it. Under the proclamation, the tariff is scheduled to expire at 12:01 a.m. Eastern on July 24, 2026 unless it is suspended, modified, terminated earlier, or extended by Congress.

That built-in sunset creates two separate issues for importers: the prospective cost of the new surcharge, and the possibility of recovering Section 122 duties later if the proclamation is successfully challenged.

Do not mix the two refund tracks

The new surcharge does not erase or reduce an importer's right to seek IEEPA refunds. Companies should track the programs separately by entry line, tariff code, duty amount, and legal authority.

We expect prompt litigation over whether the economic findings in the proclamation satisfy Section 122. Until a court grants relief, however, importers should assume CBP will collect the surcharge.

THE BOTTOM LINE: The IEEPA refund project continues. At the same time, importers should separately preserve their records and potential claims relating to the new Section 122 surcharge.