When does Section 122 expire?

Section 122 expires on July 24, 2026, exactly 150 days after it was imposed on February 25, 2026. The President may extend it for one additional 150-day period (until approximately January 20, 2027) but no further.

Can Section 122 be renewed after the extension?

No. Section 122 authority is limited to a maximum of 300 days (150 initial + 150 extension). After that, the surcharge cannot be reimposed under Section 122 without new legislation or a new balance-of-payments determination.

What is the most likely scenario for Section 122?

The most likely scenario (40–50% probability) is a 150-day extension through a new Presidential proclamation, keeping the 15% surcharge in place until approximately January 20, 2027.

Will Section 122 be replaced by a different tariff if it expires?

Possibly. The administration has several legal options including Section 338 retaliation (up to 50%), new Section 301 tariffs, Congressional legislation, or national security authorities. A replacement is estimated at 30–40% probability.

Which countries benefit most if Section 122 expires?

Countries where Section 122 is the primary tariff burden benefit most: the EU, UK, Japan, South Korea, Australia, and Taiwan. These countries would see effective tariff rates drop from 15% to near 0% on many products.

Should I delay imports until after Section 122 expires?

It depends on your products and sourcing countries. Given that extension is the most likely scenario, we recommend against delaying critical orders. Instead, build two budget scenarios and make decisions based on your tolerance for each outcome.

How will I know if Section 122 is being extended?

The extension requires a Presidential proclamation, which will be published in the Federal Register. We expect signals in late June 2026 and a formal decision in early July. Monitor our Section 122 Dashboard at /dashboard/section122 for real-time updates.

Section 122 Expires July 24, 2026: What Happens Next? (Planning Guide)

The 15% global surcharge imposed under Section 122 of the Trade Act of 1974 is set to expire on July 24, 2026 — exactly 150 days after it was imposed. Unlike most tariff actions, Section 122 has a hard statutory deadline: the President can impose a surcharge for up to 150 days, with the possibility of one 150-day extension (requiring a new Presidential proclamation). After that, the authority is exhausted.

This creates a binary situation that every importer needs to plan for. Either the surcharge expires and your costs drop 15 percentage points overnight, or the administration finds a way to extend or replace it — and your costs stay elevated or potentially increase under a different legal authority.

This guide walks through every scenario, the legal constraints, which products and countries are most affected, and gives you a planning checklist tailored to your importer profile.

Understanding Section 122: The Legal Framework

Section 122 of the Trade Act of 1974 (19 U.S.C. § 1882) gives the President authority to impose temporary import surcharges to address balance of payments problems. It was designed as an emergency stabilization tool, not a long-term trade policy instrument.

Key Legal Constraints

Maximum rate: 15% ad valorem (the current surcharge is at the statutory maximum)
Maximum duration: 150 days from the date of the Presidential proclamation
Extension: The President may extend the surcharge for one additional 150-day period by issuing a new proclamation
Total maximum duration: 300 days (150 initial + 150 extension)
No renewal: After 300 days, Section 122 authority is exhausted. The surcharge cannot be reimposed without new legislation or a new balance-of-payments determination
Scope: Applies to all imports (the statute does not allow country-specific or product-specific application under Section 122, though the President has some discretion on scope)

The Current Surcharge

Parameter	Detail
Legal authority	Trade Act of 1974, §122
Rate	15% ad valorem
Effective date	February 25, 2026
Expiration date	July 24, 2026 (150 days)
Maximum extension	January 20, 2027 (150 additional days)
Absolute expiration	January 20, 2027 (cannot be renewed)

The Three Scenarios

Scenario 1: Section 122 Expires — No Replacement

Probability: Low-Moderate (20–30%)

In this scenario, the administration allows the surcharge to expire on July 24, 2026, without imposing a replacement. This would mean:

Immediate 15% cost reduction on all imports currently subject to the surcharge
Remaining tariffs unchanged: Section 301, Section 232, antidumping/countervailing duties, and any new tariffs from the Section 301 investigations would remain in effect
Balance of payments risk: The administration would need to address the balance of payments deficit through non-tariff means

Who benefits most: Importers of products that were previously tariff-free or had low tariff rates. If you import consumer electronics from South Korea or machinery from Germany, the Section 122 surcharge may be the only significant tariff you face. Its expiration would be a major cost relief.

Why this scenario is unlikely: The administration imposed Section 122 specifically because the IEEPA tariffs were struck down. Allowing it to expire without a replacement would leave a $100B+ revenue gap and remove the primary leverage tool in ongoing trade negotiations.

Scenario 2: Section 122 Extended for 150 Days

Probability: Moderate-High (40–50%)

The most likely near-term outcome is a 150-day extension through a new Presidential proclamation, pushing the expiration to approximately January 20, 2027. This requires:

A new Presidential proclamation before July 24, 2026
A finding that the balance of payments situation has not been resolved
No Congressional action to block the extension (Congress can override by joint resolution, but this is politically difficult)

What changes with an extension:

The rate stays at 15% (the President cannot increase it under Section 122)
The scope may be narrowed — the administration could use the extension proclamation to exempt certain countries or create exclusion processes
The clock starts on the absolute maximum: the surcharge must end by January 20, 2027, regardless of circumstances

Who should plan for this: Everyone. This is the base-case scenario. Budget for 15% surcharges through January 2027 and build your financial models accordingly.

Scenario 3: Section 122 Replaced by New Authority

Probability: Moderate (30–40%)

The administration may allow Section 122 to expire but simultaneously impose tariffs under a different legal authority. The most likely replacement mechanisms:

Option A: New Section 301 Investigation (Fast-Track)

USTR could use the existing Section 301 framework to impose tariffs on a broader set of countries and products. The new Section 301 investigations announced in March 2026 (overcapacity and forced labor) could serve as the vehicle. However, Section 301 typically requires 12–18 months of investigation before tariffs can be imposed, making this a poor fit for replacing Section 122 immediately.

Option B: Section 338 Retaliation

Section 338 of the Tariff Act of 1930 allows the President to impose tariffs of up to 50% on countries that discriminate against U.S. commerce. This authority has never been used in the modern era, but legal scholars have identified it as a potential replacement for Section 122. Key differences:

No duration limit (unlike Section 122's 300-day cap)
Higher maximum rate (50% vs. 15%)
Country-specific (can be targeted rather than global)
Legally untested (would likely face immediate court challenges)

Option C: Congressional Legislation

Congress could pass new tariff legislation giving the President broader authority. Several bills have been introduced, including proposals for a permanent "trade rebalancing" tariff. However, passing legislation requires bipartisan support and typically takes months to years.

Option D: Executive Order Under National Security

The administration could invoke national security authorities (similar to Section 232 for steel/aluminum) to impose new tariffs. This would likely face legal challenges, especially given the Supreme Court's recent IEEPA ruling that limited executive tariff authority.

Country-by-Country Impact Analysis

Section 122's expiration affects every trading partner, but the impact varies significantly based on each country's existing tariff burden:

Countries Where Section 122 Is the Primary Tariff

These countries would see the most significant cost relief if Section 122 expires without replacement:

Country	Section 122 Rate	Other Major Tariffs	Total Current Rate	Rate Without §122
European Union	15%	Some AD/CVD on specific products	15–25%	0–10%
United Kingdom	15%	Minimal	15%	~0%
Japan	15%	Some Section 301 (List 4)	15–20%	0–5%
South Korea	15%	Some Section 301	15–20%	0–5%
Australia	15%	FTA-exempt on many goods	15%	0%
Taiwan	15%	Some Section 301	15–25%	0–10%

Countries Where Section 122 Stacks on Existing Tariffs

These countries already face significant tariffs; Section 122 adds another layer:

Country	Section 122 Rate	Other Major Tariffs	Total Current Rate	Rate Without §122
China	15%	Section 301 (7.5–25%), Section 232	22.5–65%+	7.5–50%+
Vietnam	15%	Some Section 301	15–40%	0–25%
India	15%	Some Section 301, AD/CVD	15–40%	0–25%
Mexico	15%	Section 232 on steel/aluminum	15–40%	0–25%
Canada	15%	Section 232 on steel/aluminum	15–40%	0–25%

Product-Specific Impact

Products Most Affected by Section 122 Expiration

Products that had low or zero tariffs before Section 122 will see the biggest change:

European machinery and industrial equipment — typically 0–3% MFN duty, now 15–18%
Japanese and Korean electronics — typically 0% MFN duty, now 15%
UK pharmaceutical ingredients — typically 0% MFN duty, now 15%
Australian agricultural products — FTA-exempt, now 15%
Consumer goods from FTA partners — previously duty-free under trade agreements, now 15%

Products Least Affected

Products already facing high tariff stacks will see proportionally less change:

Chinese goods on Section 301 Lists 1–3 — already at 25%, Section 122 brings to 40% (a 37.5% relative increase)
Steel and aluminum — already at 25% under Section 232, Section 122 brings to 40%
Products subject to AD/CVD orders — often already at 20–200%+, Section 122 is a rounding error

Planning Checklist by Importer Type

If You Import Primarily from China

Your situation: Section 122 is one layer in a multi-layer tariff stack. Its expiration helps, but your costs remain high.

Model your landed costs with and without the 15% surcharge
Identify which products see meaningful savings from Section 122 expiration
Continue diversification planning — even without Section 122, China tariff rates remain 7.5–50%+
Monitor the new Section 301 investigations for potential rate increases
Consider accelerating imports before a potential extension announcement

If You Import from Europe, Japan, or Korea

Your situation: Section 122 is likely your largest tariff cost. Its expiration would be transformative.

Model the financial impact of a full 15-point cost reduction
Do not lock in long-term pricing assuming Section 122 expires — extension is the most likely scenario
Build two budget scenarios: one with surcharge through January 2027, one without
Evaluate whether to delay non-urgent orders until after July 24
Check if your products qualify for any FTA preferences that would survive Section 122

If You Import from FTA Partner Countries

Your situation: Section 122 overrides your FTA preferences. Expiration restores duty-free treatment.

Identify all products where FTA origin certificates are on file but Section 122 is being charged
Prepare to claim FTA preference immediately upon Section 122 expiration
Ensure your FTA documentation is current and complete
Calculate the retroactive refund potential if Section 122 is found to violate FTA terms (legal opinions vary)

If You're a Diversified Importer (Multiple Countries)

Your situation: Section 122's impact varies across your portfolio. Plan category by category.

Rank your product categories by Section 122 impact (highest dollar amount first)
For each category, model the three scenarios above
Identify which sourcing decisions change under each scenario
Build a decision tree: if Section 122 expires, shift sourcing to X; if extended, continue with Y
Set up alerts for the extension announcement (expected June–July 2026)

The Extension Decision Timeline

If the administration plans to extend Section 122, the proclamation must be issued before July 24, 2026. Based on precedent, here's the likely timeline:

Date	Expected Action
May–June 2026	Internal deliberation; trade policy review
Late June 2026	Leaked reports or official signals on extension decision
Early July 2026	If extending: Presidential proclamation issued
July 24, 2026	If not extending: surcharge expires at midnight
July 25, 2026	New tariff landscape takes effect

Key signal to watch: If the administration begins negotiating country-specific deals (e.g., a trade agreement with the EU or UK), it may use Section 122 expiration as leverage — offering to exclude certain countries from the extension in exchange for concessions.

How to Monitor This in Real Time

Track the Section 122 countdown and scenario analysis on our Section 122 Dashboard. The dashboard shows:

Days remaining until expiration
Scenario modeling — toggle between expire, extend, and replace scenarios
Product-level impact — see how each scenario affects your specific HTS codes
News feed — real-time monitoring of government announcements about Section 122

What We Recommend

Plan for the extension (Scenario 2) as your base case — it's the most likely outcome
Build contingency plans for Scenarios 1 and 3 so you can move quickly
Don't make irreversible sourcing decisions based on Section 122 expiration assumptions
Do accelerate orders where you can lock in current pricing before potential replacement tariffs
Monitor weekly — the extension decision will come with limited advance notice

The 119-day countdown is ticking. Use the time to prepare, not to wait.