Update: USTR's proposed replacement is 12.5% Section 301 duties on 46 countries, due by the July 20 completion deadline. EU goods moved to the trade deal's 15% ceiling on July 1 and are insulated from the reset. Model your post-July 24 costs now. Model your post-July 24 rates →
The 10% Section 122 tariff that replaced IEEPA on February 24, 2026 has a hard sunset: it expires **July 24, 2026** — under three weeks away. The President cannot extend it unilaterally, Congress has not acted to extend it, and bipartisan appetite is uncertain with the "Reclaim Trade Powers Act" moving in the opposite direction. The replacement is now taking shape: USTR faces a **July 20, 2026 completion deadline** on the two Section 301 investigations it launched March 11 (excess manufacturing capacity in 16 economies; forced-labor enforcement across 60+), and the proposal on the table is **12.5% Section 301 duties on 46 countries** — including China, Vietnam, India, Thailand, Japan, and South Korea. Section 301 has no statutory rate cap and no time limit — which is exactly why the administration chose it. One bloc is already out of the fight: EU goods moved to the trade deal's 15% all-inclusive ceiling on July 1, insulating them from both the Section 122 expiry and the Section 301 reset. This guide walks through what July 24 actually looks like for importers, how the Section 301 replacement is scoped, and the alternative authorities still on the table.
The Countdown: Under Three Weeks Until Section 122 Sunsets
Section 122 of the Trade Act of 1974 caps emergency tariffs at 15% and time-limits them to 150 days. Trump signed the current 10% flat tariff on February 20, 2026; it took effect February 24, 2026; and it automatically expires July 24, 2026 unless Congress passes legislation to extend or replace it. The President cannot extend Section 122 unilaterally. Congress has not passed extension legislation, and bipartisan support is uncertain — some members have introduced the 'Reclaim Trade Powers Act' aimed at constraining presidential tariff authority rather than extending it. If Section 301 tariffs are not in place by July 24, imports revert to pre-IEEPA duty rates: MFN plus existing Section 232 and existing China Section 301. Plan for the 10% being the LOW end of any realistic 2026 scenario for the 46 countries on USTR's proposed list, not the ceiling.
What Replaces It: 12.5% Proposed on 46 Countries, Due July 20
On March 11, 2026, USTR initiated two new Section 301 investigations. The first targets excess manufacturing capacity in 16 economies: China, the EU, Mexico, Japan, India, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, and Bangladesh. The second targets forced-labor enforcement across 60+ economies, including the UK. Public comment closed April 15, and USTR is running an accelerated ~5-month timeline with a completion deadline of July 20, 2026 — four days before Section 122 lapses. The proposal now on the table: 12.5% Section 301 duties on 46 countries, including China, Vietnam, India, Thailand, Japan, and South Korea. Unlike Section 122, Section 301 has NO rate cap and NO time limit, so 12.5% is a starting proposal, not a statutory ceiling. Two carve-outs worth knowing: EU goods moved to the trade deal's 15% all-inclusive ceiling on July 1, 2026, taking the bloc out of the Section 301 reset entirely; and on June 18, USTR opened a separate Section 301 investigation against Germany over persistent underpayment for innovative pharmaceutical products — a sector-specific track that runs through the deal's pharma cap. Section 301 is the administration's legally durable replacement for what IEEPA couldn't deliver.
Other Authorities Still on the Table
Section 301 is the main play, but it's not the only one. Section 232 investigations into pharmaceuticals, pharmaceutical active ingredients, and medical devices are ongoing and could produce new national-security tariffs in 2026 — these would stack on top of any Section 301 rates. Section 338 of the Tariff Act of 1930 is a never-used retaliatory power that allows tariffs of up to 50% on imports from countries that discriminate against US commerce; unlike Section 301, Section 338 doesn't require an investigation and could be invoked rapidly if the administration wants a dramatic response. Congressional extension of Section 122 remains technically possible but politically uncertain. The realistic July 24 scenario for importers: Section 301 rates announced before the sunset, Section 232 rates extending into new product categories, and Section 122 either lapsing or being bumped to 15% in its final weeks.
Impact by Country for the 16 Under Investigation
The 16 economies under Section 301 investigation overlap heavily with the ones that saw the biggest IEEPA relief after the SCOTUS ruling — and most now sit on USTR's proposed 46-country, 12.5% list. Vietnam (was 46% IEEPA, now 10% Section 122) would land at a proposed 12.5%, with room to go higher since Section 301 has no cap. Thailand (was 36%), India, Japan, and South Korea are on the proposed list too. Bangladesh, Cambodia, and Indonesia — all countries that saw dramatic IEEPA drops — remain exposed through the excess-capacity investigation. Taiwan (was 32%) faces a different mix because Section 232 semiconductor tariffs already apply. China gets comparatively less additional impact because existing Section 301 tariffs (25–100%) already cover most Chinese goods — the proposed 12.5% would be a new layer on an already-high stack. EU countries are out: as of July 1, 2026 they pay the trade deal's 15% all-inclusive ceiling, which insulates them from both the Section 122 expiry and the Section 301 reset (though USTR's June 18 pharma-pricing investigation against Germany shows sector-specific pressure continues). Mexico — the USMCA partner where the US just declined renewal at the July 1 joint review — is where Section 301 is most politically fraught. For country-specific implications, see our tariff pages for each of the 16.
What Importers Should Do Before July 24
Plan for rates to stay at or above 10% after July 24 under Section 301 — the 10% Section 122 baseline is likely the LOWEST rate importers will see for the foreseeable future. Section 301 tariffs could be HIGHER than current 10% for some countries, particularly Vietnam, Cambodia, Bangladesh, and Thailand where IEEPA rates were in the 35–46% range. Practical moves: (1) Lock in pricing and contracts now while the 10% rate is known; (2) Monitor USTR announcements weekly through June for preliminary findings on the excess-capacity investigation; (3) Consider accelerating shipments before July 24 if your lead times allow — inventory at the 10% rate may be cheaper than inventory at whatever Section 301 produces; (4) Use our scenario simulator to model cost impact under different assumed Section 301 rates for your specific country-product mix; (5) Track Section 122 payments separately from other duties in your accounting so that if Section 122 is also struck down (see below), you can file for those refunds too.
Section 122 Legal Challenges
Section 122 itself is being challenged. On March 5, 2026, 24 states filed suit in the US Court of International Trade arguing that the 10% flat tariff is not applied 'consistently' as Section 122 requires — since some countries have country-specific exemptions and agreements layered on. A separate business coalition lawsuit was filed March 9. The CIT ruled on May 7, 2026 that the 10% Section 122 tariff is unlawful — but the Federal Circuit stayed that ruling (a brief administrative stay around May 12, then a stay pending appeal on June 11, 2026), so CBP keeps collecting the 10% while the appeal proceeds. Notably, the June 11 panel found the government had shown a likelihood of success, so the outcome is far from certain. If Section 122 is ultimately struck down, importers who paid the 10% flat tariff from February 24 onward could become eligible for a second round of refunds — separate from the CAPE IEEPA refunds. That's why tariff-tracking tools including GingerControl and our own calculator flag Section 122 payments as a distinct line item: if the ruling comes down, you'll want records you can file against. The combined outcome if both IEEPA (already struck) and Section 122 (pending) are invalidated: US importers will have paid $166B+ in IEEPA duties and additional Section 122 duties that could also be refundable, leaving Section 232 and Section 301 as the only durable tariff authorities.
What a Post-Section 122 World Looks Like
Three realistic scenarios for July 25, 2026. Scenario A — Section 301 lands cleanly before the sunset: rates for the 16 investigated economies jump to country-specific levels (likely 15–40% depending on country and product), Section 232 expansions add coverage for pharma and medical devices, Section 122 lapses. This is the administration's preferred outcome. Scenario B — Section 301 is delayed past July 24: Section 122 lapses and there's a short window where MFN rates apply alone, creating a narrow import-acceleration opportunity before Section 301 catches up. Scenario C — Congress extends Section 122 at 10% or 15% while Section 301 is finalized: rates hold steady while Section 301 investigations complete, then stack. For importers, Scenario A is the most likely and also the most expensive. Model all three in our scenario simulator to see which drives the highest cost for your specific product-country mix, and prioritize inventory and contract actions on that case.
Key Takeaway
Section 122 expires July 24, 2026, and USTR's Section 301 completion deadline is July 20 — with 12.5% duties proposed on 46 countries including China, Vietnam, India, Thailand, Japan, and South Korea. Section 301 has no statutory rate cap and no time limit, so treat 12.5% as the floor of the proposal, not the ceiling. EU goods are already out of the fight at the trade deal's 15% ceiling. Accelerate shipments where lead times allow, lock in contracts at the 10% rate now, track Section 122 payments separately in case that authority is also struck down, and model the realistic post-July 24 scenarios using our scenario simulator.
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