Section 122 has expired. The flat 10% Section 122 tariff reached its 150-day statutory limit and lapsed at 12:01 a.m. ET on July 24, 2026. It was replaced the same moment by the two-tier 10%/12.5% Section 301 forced-labor tariff on ~60 economies. The EU remains on its 15% all-inclusive deal ceiling. This guide is kept as a reference on how Section 122 worked and what replaced it. What US importers pay now →
On February 20, 2026, the Supreme Court struck down all IEEPA reciprocal tariffs in a 6-3 ruling. Hours later, President Trump signed a 10% flat tariff under Section 122 of the Trade Act of 1974 — the first time this authority has been invoked in decades. From February 24 to July 24, 2026, the Section 122 tariff was a dramatic simplification: nearly every country faced the same 10% rate, replacing the patchwork of IEEPA rates that ranged from 10% to 46% for most countries (China peaked at 145%). But Section 122 has a hard 150-day time limit — and it lapsed on schedule at 12:01 a.m. ET on July 24, 2026 because Congress did not extend it. It was replaced the same moment by the two-tier 10%/12.5% Section 301 forced-labor tariff on roughly 60 economies; the EU had already moved to its 15% all-inclusive deal ceiling on July 1. This guide explains how the Section 122 tariff worked while it was in force, which countries it helped most, and what replaced it — useful context for anyone reconciling 2026 entries or checking refund eligibility. For the rates importers pay today, see [what US importers pay now after Section 122](/guides/section-122-expires-july-24-2026-importer-playbook).
What Is Section 122 and Why Was It Used?
Section 122 of the Trade Act of 1974 (19 U.S.C. § 2132) authorizes the president to impose temporary import surcharges of up to 15% to address large and serious balance-of-payments deficits. It was designed as an emergency trade tool — not a long-term tariff mechanism. The provision was last used by President Nixon in 1971 when he imposed a 10% import surcharge during a dollar crisis. The Trump administration turned to Section 122 because it is one of the few remaining presidential authorities for broad tariff action after SCOTUS closed the IEEPA route. Critically, Section 122 includes a built-in 150-day time limit. The president cannot extend it unilaterally — only Congress can authorize continuation beyond that window. This makes the current 10% tariff inherently temporary, expiring around July 24, 2026.
The New Rate Structure: 10% Flat — With One July 2026 Exception
The section 122 tariff rates 2026 are remarkably simple compared to the old IEEPA regime. Nearly every country faces the same 10% ad valorem tariff on imports, effective February 24, 2026 at 12:01 AM ET. One bloc has since left the system: as of July 1, 2026, EU-origin goods pay the EU-US trade deal’s 15% all-inclusive ceiling instead of Section 122 — the ceiling includes MFN rather than stacking on it, and EU goods are insulated from the July 24 Section 122 expiry. For everyone else there are no country-specific variations, no product-specific carve-outs within the Section 122 framework, and no graduated tiers. This replaces IEEPA reciprocal rates that varied widely: Vietnam was at 46%, Bangladesh at 37%, Thailand at 36%, Taiwan at 32%, Switzerland at 31%, South Africa at 30%, EU countries at 20%, China at 20% (10% reciprocal + 10% fentanyl, after the China reciprocal rate had peaked at 145% earlier in the trade war), and most other countries at 10%. For countries that were previously at 10% under IEEPA — including Japan, the UK, Canada, Mexico, Brazil, and Turkey — the effective rate is unchanged. Note: Treasury Secretary Bessent publicly signaled on March 4, 2026 that the Section 122 rate could be raised to 15% (the statutory maximum under Section 122). No formal proclamation ever followed — the Section 122 rate stayed at 10% for its entire run and was never raised to 15% before the July 24 sunset.
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Biggest Winners: Countries With the Largest Rate Drops
The countries that benefit most from the shift to section 122 tariff rates are those that faced the highest IEEPA reciprocal rates. Vietnam leads the pack with a drop from 46% to 10% — a 36 percentage point reduction that makes Vietnamese goods dramatically more competitive overnight. A $100,000 shipment of furniture from Vietnam now costs $10,000 in tariffs instead of $46,000. Bangladesh drops from 37% to 10%, providing massive relief for the garment industry. Thailand falls from 36% to 10%, benefiting electronics and auto parts exporters. Taiwan drops from 32% to 10%, a boon for semiconductor-adjacent products and electronics. Indonesia goes from 32% to 10%, and South Korea from 25% to 10%. EU countries including Germany, France, Italy, and the Netherlands initially dropped from 20% to 10% — though as of July 1, 2026 the EU pays the trade deal’s 15% all-inclusive ceiling instead of Section 122. Even India, which had already negotiated a reduced rate of 18%, benefits with a further cut to 10%. Note the July horizon: USTR has proposed 12.5% Section 301 duties on 46 countries — including China, Vietnam, India, Thailand, Japan, and South Korea — to replace Section 122 when it expires July 24, with a July 20 completion deadline.
What Tariffs Still Apply on Top of Section 122
The 10% Section 122 rate is not the only tariff importers pay. Section 232 tariffs remain fully in effect: steel and aluminum at 50% on articles wholly of the metal (25% on derivative products, on full customs value, since the April 6, 2026 restructuring), automobiles at 25%, copper at 50% (25% on derivatives), semiconductors at 25%, and lumber at 10%. Note that Section 232 goods are excluded from the 10% Section 122 surcharge to the extent the 232 duty applies (Section 122 reaches only any non-metal content). For example, an article wholly of steel from Germany faces 50% (Section 232), not 60% — Section 122 does not stack on the metal. A derivative steel article is at the 25% Section 232 tier on the full customs value. Section 301 tariffs on China also remain. Most Chinese goods still face 25-100% in Section 301 duties. While Section 122 was in force, the effective rate on Chinese electronics was about 35% (10% Section 122 + 25% China Section 301); since July 24 the forced-labor tier replaced the 10% layer, so it is now roughly 37.5% (12.5% Section 301 forced-labor + 25% China Section 301). Trade agreement preferences like USMCA continue to exempt qualifying goods from the baseline surcharge, just as they exempted goods from IEEPA tariffs.
The 150-Day Clock: What Actually Happened on July 24, 2026
Section 122's 150-day authority expired at 12:01 a.m. ET on July 24, 2026. Congress did not extend it, so the flat 10% surcharge lapsed by operation of law. But importers did not revert to plain MFN rates: at the same moment, USTR's final Section 301 "forced-labor" action took effect, so there was no gap. That replacement is broader than the 46-country, single-rate plan floated earlier in the summer — the final scope is a two-tier structure covering roughly 60 economies (about 99.4% of US imports by value): a 10% rate for the smaller group USTR found had at least partial forced-labor import protections in place, and 12.5% for the rest. EU-origin goods are not part of the action and stay on the trade deal's 15% all-inclusive ceiling; Section 232 metals/autos and existing China-specific Section 301 lines are unaffected and stack on top. So for most importers the practical baseline barely moved (10% → 10% or 12.5%), but the legal basis shifted from Section 122 to Section 301 — and in August 2026 a coalition of 25 states sued to block the forced-labor tariff, though CBP continues collecting it while the case proceeds. Duties paid under the struck-down IEEPA reciprocal rates in 2025 remain refundable regardless.
Impact on China: Section 301 Still Dominates
China presents a unique case. While the IEEPA tariff dropped from 20% to 10% under Section 122, then to the 12.5% Section 301 forced-labor tier when Section 122 expired July 24, 2026, China-specific Section 301 tariffs ranging from 25% to 100% remain the dominant cost factor. Electronics now face approximately 37.5% effective rates (12.5% + 25%), down from 45% under IEEPA. EV batteries face 37.5% (12.5% + 25%), solar panels face 62.5% (12.5% + 50%), and electric vehicles face 112.5% (12.5% + 100%). The de minimis threshold for Chinese imports remains eliminated — every shipment is subject to full duties regardless of value. For importers sourcing from China, the shift off IEEPA provides modest relief, but the tariff burden remains substantially higher than for any other country due to the China-specific Section 301 duties.
How to Calculate Your Rate Under the Forced-Labor Tariff
Calculating your effective tariff rate under the current regime requires checking three layers. Step 1: Start with the base surcharge — the Section 301 forced-labor tariff that replaced Section 122 on July 24, 2026 (10% or 12.5% depending on the country's tier; applies unless a trade agreement exempts your goods). Step 2: Add any applicable Section 232 tariff — 50% on articles wholly of steel, aluminum, or copper, 25% on their derivative products (autos 25%, semiconductors 25%, lumber 10%), all on full customs value since the April 6, 2026 restructuring. Step 3: Add any applicable China-specific Section 301 tariff — 25% for most products, higher for strategic goods. Example: aluminum auto parts (derivative articles at the 25% tier) from China cost 12.5% (forced-labor) + 25% (Section 232 derivative) + 25% (China Section 301) = 62.5%. The same parts from South Korea (10% tier) cost 10% + 25% (Section 232 derivative) = 35%, with no China Section 301. A shipment of raw aluminum (wholly metal) would instead carry the 50% Section 232 rate (the base surcharge does not stack on the metal). From USMCA-qualifying Mexico: 0% (surcharge exempt) + 25% (Section 232) = 25%. Use our tariff calculator for instant estimates with all layers included.
Supply Chain Strategy Under the Forced-Labor Tariff
With Section 122 replaced by the two-tier 10%/12.5% Section 301 forced-labor tariff, the strategic picture has settled but still rewards planning. First, know your tier: sourcing from a 10%-tier country (e.g. Japan, South Korea, Taiwan, India) versus a 12.5%-tier country (e.g. China, Vietnam, Thailand) is now a 2.5-point base-rate difference before Section 232/301. Second, diversify supplier relationships — the collapse of the old variable IEEPA rates means cost, lead time, and quality matter more than tariff arbitrage for most non-China sourcing. Third, pursue IEEPA tariff refunds: companies that paid IEEPA reciprocal tariffs from April 2025 through February 2026 may be entitled to refunds through CBP's CAPE process — this is the largest lever still available. Fourth, watch the litigation: in August 2026 a coalition of 25 states sued to block the forced-labor tariff, though CBP continues collecting it while the case proceeds, so do not assume the base surcharge will disappear.
Key Takeaway
The shift from IEEPA to Section 122 in early 2026 was the most significant US tariff change since the original reciprocal tariffs were imposed in April 2025 — but it was always temporary. The uniform 10% rate delivered real savings for importers sourcing from previously high-tariff countries (Vietnam alone dropped 36 points), then expired on schedule at its 150-day limit on July 24, 2026. It did not revert to plain MFN: the two-tier 10%/12.5% Section 301 forced-labor tariff took over the same moment, so most importers pay roughly the same baseline under a new legal authority (now being challenged in court by 25 states). The lasting takeaway for importers is refunds — duties paid under the struck-down IEEPA rates in 2025 remain claimable. Use our [tariff calculator](/tariff-calculator) to model your current costs, and check the [refund tracker](/guides/fedex-ups-dhl-tariff-refund-tracker) if you overpaid.
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