What Is Section 122?
Section 122 of the Trade Act of 1974 is a rarely used presidential authority that permits the imposition of temporary import duties during a balance-of-payments emergency. President Trump became the first president to leverage Section 122 to impose tariffs, doing so immediately after the Supreme Court struck down IEEPA tariffs on February 20, 2026.
The new 10% global tariff took effect at 12:01 a.m. ET on February 24, 2026.
Key Facts for Importers
Rate and Duration
The current rate is 10% ad valorem on goods from all countries of origin. President Trump has publicly stated his intent to raise this to 15% — the statutory maximum under Section 122 — though no formal action has been taken as of this writing.
The tariff is valid for a maximum of 150 days, expiring July 24, 2026. After that, Congressional approval would be required to extend it.
What's Exempt
Several product categories are excluded from the Section 122 tariff:
- Critical minerals specified in the proclamation
- Energy and energy products
- Certain agricultural goods
- USMCA-compliant goods from Canada and Mexico
- CAFTA-DR goods from Central American and Dominican Republic trade partners
- Products under Section 232 tariffs (steel, aluminum, copper, wood products)
- Goods in transit before February 24 that entered before February 28
Stacking with Other Duties
The Section 122 tariff applies on top of all other tariffs, taxes, fees, and charges — except for Section 232 tariffs. This means if your product already carries Section 301 duties (e.g., Chinese goods), the 10% Section 122 duty is added to that.
Legal Challenges Ahead
Twenty-four states have filed suit in the Court of International Trade to block Section 122 tariffs, arguing that a trade deficit doesn't constitute the "balance-of-payments emergency" the statute requires. Legal experts are watching this closely — if successful, these tariffs could face the same fate as IEEPA duties.
Strategies to Minimize Impact
1. Verify USMCA qualification. If your goods qualify under USMCA rules of origin, they're exempt from Section 122. This is one of the most valuable exemptions available right now.
2. Review your product exclusions. Cross-reference your HTS codes against the proclamation's Annexes I and II to identify any exemptions.
3. Accelerate USMCA certifications. For borderline products, investing in proper origin determination now could save significant duty costs over the next four months.
4. Consider sourcing adjustments. With the tariff set to expire in July, short-term sourcing shifts may be warranted for high-volume imports.
5. Plan for expiration. Build scenarios for both expiration and Congressional extension into your Q3/Q4 planning.
Our customs team can help you analyze your specific product portfolio against Section 122 exclusions. Get in touch for a complimentary duty exposure assessment.