Section 122 Tariffs Explained: The 150-Day Clock on Trump's New Trade Policy

Section 122 of the Trade Act of 1974 is the emergency tariff authority President Trump invoked on February 21, 2026, one day after the Supreme Court struck down his IEEPA tariffs. The new 15% global import surcharge applies to most goods entering the United States — but it comes with a hard 150-day expiration date that changes the calculus for every importer in the country.

What Is Section 122 of the Trade Act of 1974?

Section 122 (codified at 19 U.S.C. § 2132) is a rarely used trade statute that gives the President authority to impose a temporary import surcharge when the U.S. faces large and serious balance-of-payments deficits. Unlike IEEPA — which the Supreme Court ruled does not authorize tariffs at all — Section 122 explicitly mentions tariffs and import restrictions. That makes it constitutionally safer ground.

But the statute comes with hard constraints that IEEPA did not have:

Feature	IEEPA (struck down)	Section 122 (current)
Maximum rate	No statutory limit (rates reached 50%+)	15% ceiling
Duration	Indefinite	150 days without Congressional extension
Legal basis for tariffs	Disputed — SCOTUS said no	Explicit statutory authority
Scope	Any product, any country	Broad, but USMCA and certain ag exemptions apply
Congressional check	None required	Must get Congressional approval to extend

The 150-day clock started on February 21, 2026, which means Section 122 tariffs expire on July 21, 2026 unless Congress votes to extend them.

What Rate Are Importers Paying Now?

Trump set the Section 122 tariff at 15%, the statutory maximum. This applies as an ad valorem surcharge on top of existing MFN (most-favored-nation) base duties.

Here's how the tariff stack looks for common import scenarios as of late February 2026:

Importing from China

Duty Layer	Rate
MFN base duty	Varies (0–20% depending on HTS code)
Section 301 tariffs	7.5–25%
Section 232 (steel/aluminum only)	25%
Section 122 surcharge	15%
Effective rate range	22.5–65%+

China importers face the heaviest burden because Section 301 duties stack on top of the new Section 122 surcharge. For electronics in the 25% Section 301 bracket with a 0% MFN base rate, the combined rate is now 40% (25% + 15%).

Importing from Vietnam, India, or Other Non-China Asia

Duty Layer	Rate
MFN base duty	Varies
Section 122 surcharge	15%
Effective rate range	15–35%

These countries saw the biggest relief from the SCOTUS ruling. Under IEEPA, Vietnam was hit with a 46% reciprocal tariff. That dropped overnight to a 15% Section 122 surcharge — a net savings of roughly 31 percentage points.

Importing from Canada or Mexico (USMCA)

Goods qualifying under the United States-Mexico-Canada Agreement (USMCA) are largely exempt from the Section 122 surcharge. However, goods that don't qualify under USMCA rules of origin — or that fall under separate Section 232 duties — still face the surcharge.

Why 150 Days Matters

The most important thing about Section 122 is the clock. Unlike IEEPA tariffs, which the administration treated as indefinite, Section 122 has a hard statutory expiration.

Key dates:

Date	Event
Feb 20, 2026	SCOTUS strikes down IEEPA tariffs
Feb 21, 2026	Trump invokes Section 122 at 15%
Jul 21, 2026	Section 122 expires (150 days)
Before Jul 21	Congress must vote to extend, or tariffs lapse

This creates a 150-day window of uncertainty. The administration has signaled it will pursue multiple paths simultaneously:

1. Congressional legislation: Seeking new, permanent tariff authority from Congress. But with a divided legislature, passing tariff bills is far from guaranteed.

2. Expanded Section 301 investigations: The U.S. Trade Representative can launch new Section 301 investigations against specific countries for unfair trade practices. These take time — typically 12–18 months — but result in tariffs with no expiration date.

3. Section 232 expansion: The Commerce Department could broaden national security tariff investigations to cover more products beyond steel and aluminum. These also take months.

4. Bilateral trade deals: The administration has hinted at negotiating bilateral agreements that could include tariff provisions.

For importers, the question is: what happens on July 22? If Congress doesn't act and no replacement authority is in place, the Section 122 surcharge simply expires. Products not covered by Section 301 or Section 232 would revert to MFN-only rates — potentially the lowest tariff environment since early 2025.

How Section 122 Affects Your Business Right Now

If You're Paying Less Than Before

For importers from countries that faced high IEEPA reciprocal rates (Vietnam at 46%, Thailand at 36%, Indonesia at 32%), the shift to a flat 15% is a meaningful cost reduction. If your landed costs dropped, consider whether to:

• Pass savings to customers to capture market share while the window lasts
• Stockpile inventory at the lower rate before potential replacement tariffs
• Diversify suppliers to countries where the rate differential is now smaller

If You're Paying More Than Before

Some products from Canada and Mexico that were exempt from IEEPA tariffs may now face the Section 122 surcharge if they don't qualify under USMCA. Review your USMCA certificates of origin to ensure you're claiming every exemption available.

Uncertainty Planning

The 150-day expiration means you can't plan beyond July with certainty. Build scenarios for three outcomes:

1. Section 122 expires with no replacement — rates drop to MFN + Section 301/232 only
2. Congress extends Section 122 — 15% surcharge continues indefinitely
3. New authority replaces Section 122 — potentially higher or more targeted rates

Section 122 vs. IEEPA: Key Differences for Importers

The shift from IEEPA to Section 122 isn't just a legal technicality. It changes the practical landscape:

Lower rates: 15% maximum vs. 10–50%+ under IEEPA. For most importers, total duty costs dropped.

Temporary by design: The 150-day limit creates urgency but also opportunity. Importers who act within this window may lock in cost advantages.

Stronger legal footing: Unlike IEEPA tariffs, Section 122 explicitly authorizes import surcharges. Legal challenges are less likely to succeed, though several trade groups are already testing arguments around the balance-of-payments justification.

USMCA matters more: Under IEEPA, the administration applied tariffs to Canada and Mexico despite USMCA. Under Section 122, USMCA-qualifying goods have clearer exemption paths.

How TariffCenter.AI Can Help

The Section 122 transition creates a narrow window where smart importers can reduce costs and reposition their supply chains. But you need to know your exact duty exposure to act.

TariffCenter.AI can help you:

• Calculate your current duty stack across all active tariff programs (MFN + Section 301 + Section 232 + Section 122)
• Model scenarios for what happens when Section 122 expires or gets replaced
• Identify USMCA exemptions for your Canada/Mexico imports
• Track the 150-day clock and Congressional action on tariff legislation

Try our duty calculator or start a free chat to analyze your specific tariff situation.

The Bottom Line

Section 122 is a stopgap — powerful but temporary. The 15% rate is lower than what most importers were paying under IEEPA, but the 150-day clock means this rate isn't permanent. Importers who understand the new rules and plan for multiple scenarios will be best positioned no matter what comes next.

Disclaimer: This article reflects the tariff landscape as of February 26, 2026. Rates and policies are changing rapidly. TariffCenter.AI is an informational tool — not a law firm or licensed customs broker. Always consult qualified professionals for advice specific to your imports.