Section 122 Surcharge Scheduled to Expire: What Importers Need to Know

UPDATE (July 24, 2026 outcome): the surcharge did lapse at 12:01 a.m. eastern time on July 24, 2026 — but it did NOT simply disappear from landed-cost calculations for most importers. A forced-labor Section 301 duty (10% or 12.5% on roughly 60 economies) took effect the same moment and backfilled the lapse. See the realized-cliff article for the full picture. Original pre-cliff analysis: Section 122 of the Trade Act of 1974 carries a statutory 150-day maximum duration. The surcharge imposed on February 24, 2026 was therefore scheduled to automatically expire on July 24, 2026 unless Congress acted to extend it or the administration reimplemented tariffs under a different legal authority.

UPDATE (July 24, 2026 outcome): the roughly 60 economies covered by the forced-labor Section 301 duty saw the surcharge replaced, not removed — landed costs did not fall to zero for those importers. Original pre-cliff analysis: all importers paying the Section 122 surcharge at the time — effectively all US importers of non-USMCA, non-S232 goods — were expected to see a reduction in landed costs upon expiration; that expectation held only for the roughly 109 economies not on the forced-labor list.

Section 122 Surcharge Scheduled to Expire: What Importers Need to Know (effective 2026-07-24). UPDATE (July 24, 2026 outcome): the surcharge did lapse at 12:01 a. Section 122 of the Trade Act of 1974 grants the President limited authority to impose import surcharges for up to 150 days when the US balance of payments is in serious deficit. The authority has rarely been used in modern trade policy — its invocation in February 2026 came directly in response to the Supreme Court striking down IEEPA tariff authority on February 20, 2026, leaving the administration without a legal mechanism to maintain its tariff program. The proclamation imposed a uniform global surcharge on most US imports, with explicit exemptions for USMCA-qualifying goods from Canada and Mexico and for products already covered by Section 232 national security tariffs. The 150-day limit was statutory and could not be extended without Congressional action; with no extension passed (S.4049 was a repeal, not an extension), the surcharge lapsed by operation of law at 12:01 a.m. eastern time on July 24, 2026. The same moment, a forced-labor Section 301 duty (10% or 12.5% on roughly 60 economies) took effect and backfilled the lapse for most affected importers, so landed costs did not simply drop to the pre-surcharge level. Importers are advised to review their supply chains for USMCA qualification opportunities, which remain the most straightforward path to avoiding both the former Section 122 surcharge and the forced-labor Section 301 duty on Canadian and Mexican sourcing. The combination of the forced-labor Section 301 duty, Section 232 rates on steel and aluminum, and the China-specific Section 301 tariffs means the effective tariff rate for many importers remains substantially higher than at any point since 1947.

With Section 122 lapsed and a forced-labor Section 301 duty now the operative layer for ~60 economies, importers can minimize exposure by: (1) verifying USMCA qualification for Canadian and Mexican sourcing, as USMCA-qualifying goods are excluded from both the former surcharge and the forced-labor duty; (2) confirming whether your product categories fall under Section 232 coverage, which is likewise excluded from the forced-labor duty; (3) treating the forced-labor Section 301 duty (10% or 12.5% by economy) — not the lapsed Section 122 surcharge — as the operative layer when modeling landed cost, and checking whether your economy is on the 60-economy list at all. Customs brokers recommend reviewing Bills of Lading and entry documentation carefully to ensure applicable exclusions (headings 9903.05.90/.93/.94) are claimed.

• Section 122 Status Hub
• Section 122 Expiration Guide
• Section 122 Explainer
• What-If Calculator