Section 122 Surcharge Expiration Approaching: What Importers Need to Know Before July 24

A clock that started on February 24

Section 122 of the Trade Act of 1974 is unusual among the tariff authorities in force during 2026 because it comes with a built-in expiry. The statute lets the President impose an import surcharge to address a serious balance-of-payments deficit, but it caps that surcharge at 150 days unless Congress acts to extend it. The current surcharge took effect February 24, 2026, and the Federal Register notice (document 2026-03824) published the day after set the operative rate at 10% on most imports. Count 150 days forward and the surcharge is scheduled to lapse on or about July 24, 2026 — a date that is now close enough to plan around rather than speculate about.

What expiration does and does not do automatically

The important word is automatically. Unless something affirmatively renews it, the surcharge ends on its own when the statutory window closes; it does not roll over by default. There are three ways the July date could play out. Congress could legislate an extension, which would keep the 10% in place. The administration could reimplement an equivalent tariff under a different statute, as it did in February when it pivoted to Section 122 after the Supreme Court struck down the earlier emergency-powers tariffs. Or the surcharge could simply expire, removing the 10% layer from landed-cost calculations for every good currently subject to it. None of those outcomes is guaranteed today, which is why the responsible posture is to model the cliff rather than bet on a single result.

Why the date of entry, not the date of order, controls

For importers with goods in transit through the summer, the operative question is timing, and the timing that matters is the date the goods are entered for consumption at the border — not the date the purchase order was cut or the date the vessel departed. A shipment that clears customs on July 23 is subject to the 10% surcharge; the same shipment clearing on July 25, if the surcharge has lapsed and nothing has replaced it, would not be. That makes the back half of July a genuine planning window for goods that can be scheduled around the date, and it makes accurate entry-date forecasting more valuable than usual for anyone managing inventory arrivals across the cliff.

The layers expiration would leave untouched

It would be a mistake to read the expiration as a return to duty-free importing. Section 122 was always a surcharge that sat on top of other obligations, and several of those obligations are unaffected by its end. USMCA-qualifying goods from Canada and Mexico are already at zero and stay there. Goods covered by Section 232 — steel, aluminum, copper, automobiles, lumber, and semiconductors — were exempt from the Section 122 surcharge in the first place, so its expiration changes nothing for them. Section 301 tariffs on Chinese-origin goods are a separate authority entirely and continue regardless. What expiration removes is specifically the 10% balance-of-payments layer on the broad set of non-USMCA, non-Section-232 goods that were carrying it.

How to model both sides of the cliff

The practical task between now and late July is to build two versions of every affected cost model: one with the 10% surcharge and one without. The tariff calculator supports this directly through its what-if toggle, so you can see the same shipment priced under both the current regime and a post-expiration scenario without rebuilding the inputs. The Section 122 explainer carries a live countdown to the statutory date, and the Section 122 expiration guide walks through the decision points for purchasing, pricing, and inventory timing in more depth. The goal is not to predict the outcome but to be ready for either one the moment it is known.

The scale of what is hanging on the date

The stakes are not marginal. The Tax Foundation has estimated that the Section 122 surcharge applies to roughly $1.2 trillion of imports, which is why its expiration or extension is one of the most consequential open questions in US trade policy for the year. For an individual importer the arithmetic is simpler but no less real: every $1 million of affected annual import value carries about $100,000 in Section 122 duty at the 10% rate, an amount that either continues or disappears depending on what happens at the end of July. Treat the date as a live variable in your 2026 planning, not a footnote.

A surcharge with few modern precedents

Part of what makes the July date hard to forecast is that Section 122 has rarely been used. The balance-of-payments surcharge authority sat largely dormant in modern trade policy until February 2026, when it was reached for specifically because the administration needed a statutory basis to keep a tariff program running after the Supreme Court invalidated the emergency-powers route four days earlier. There is little recent practice to indicate whether a lapse will be allowed to stand, challenged in court, or papered over with a substitute authority, which is precisely why the prudent assumption is uncertainty rather than continuity in either direction. An importer who assumes the surcharge will quietly continue is taking the same risk as one who assumes it will cleanly vanish; neither is supported by a track record.

The categories with the most riding on the outcome

The importers most exposed to the cliff are those whose goods carry the surcharge and nothing that would survive its end — broadly, non-USMCA sourcing from countries without a Section 232 product profile, which covers much of the consumer-goods, machinery, and general-merchandise trade. Low-value e-commerce shipments are a notable case, because the suspension of the de minimis exemption already subjects them to duty, and the Section 122 layer is part of that bill today. For those goods the July outcome is the difference between a 10% surcharge applying to every parcel and not applying at all, which is why even small-parcel importers should be watching the date as closely as the container-scale ones. The practical preparation is the same at any volume: know which of your product lines carry the surcharge, and have a post-expiration price ready to switch to the moment the question resolves.