On February 20, 2026, the Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, effectively ending the IEEPA-based duties used over the last year.
In response, the Administration pivoted to Section 122 of the Trade Act of 1974, and U.S. Customs and Border Protection (CBP) stopped collecting IEEPA duties as of 12:00 a.m. ET on February 24, 2026. Immediately following this, CBP began assessing a temporary 10% surcharge under Section 122 for 150 days.
Officials have publicly signaled a potential increase to 15% (the statutory cap), but no proclamation or Federal Register notice has been issued to date, and CBP guidance continues to reference 10%.
For importers, this means adjusting immediately to a new filing framework under Section 122 while also preparing for refund activity tied to previously paid IEEPA duties. The sections below outline what has changed, what remains in effect, and the steps importers should take now to manage both compliance and cost exposure.
Operational details: What changed—and what didn’t
With the shift from IEEPA to Section 122, importers are operating under a new tariff overlay, while much of the broader trade framework remains intact. Understanding both sides of that equation is critical to avoiding misapplication at the entry line and errors in landed-cost modeling.
What’s changing?
The Section 122 surcharge now applies broadly at a 10% rate, subject to specific exclusions outlined in the White House proclamation and fact sheet. Key exclusions include:
- USMCA-qualifying goods
- Articles already covered by Section 232 (to avoid stacking)
- A narrow ocean in-transit exception for goods loaded before February 24 and entered before February 28, 2026
Beyond Section 122, the Administration has signaled new Section 301 and possibly Section 232 investigations, which could lead to additional, longer-duration tariffs.
What’s staying the same?
- Section 232 duties and existing Section 301 measures remain in effect where applicable, neither the Court’s IEEPA decision nor the Section 122 surcharge displaces those duties
- Duty-free de minimis treatment remains suspended and formal ACE entries are still required for low-value shipments unless they fall within narrow statutory exceptions.
From an import accounting perspective, the Section 122 surcharge should be layered alongside standard duty rates and other applicable measures, while ensuring exclusions prevent improper duty application. Any operational adjustments implemented in 2025 in response to the de minimis suspension should remain in place.
Section 122: A temporary bridge with a clock
Expect Section 122 to function as a bridge rather than an endpoint. The statute caps the surcharge window at 150 days, so the planning horizon is short.
Action steps
- Build landed‑cost scenarios at 10% through late July
- Keep a “what‑if” view for a rate change (which would require a new proclamation) or a Congressional extension
- Coordinate with your broker to ensure line‑level application of Section 122
- Validate any applicable exemptions
- Align your analytics to reflect the new surcharge overlay
Section 301, 232 & 201: What may come next
Because Section 122 is limited to 150 days, attention will likely shift to longer-term trade authorities that could define the next phase of tariff policy:
- Section 301: targets unfair practices and often results in durable, targeted tariffs
- Section 232: covers national‑security concerns and can impose tariffs or quotas
- Section 201: provides temporary safeguard relief following an International Trade Commission finding
For importers, the key is to think beyond the current 10% surcharge. This means modeling landed costs across all three, monitoring new investigations, and validating entry‑line coding to prevent double‑counting where exclusions apply.
The refund question: What’s uncertain—and what you can do now
While the IEEPA outcome is clear and refunds have been ordered, there are still developments to be monitored. The Court of International Trade (CIT) has ordered that entries that have not reached final liquidation status be liquidated or reliquidated to refund IEEPA paid duties to importers. “Final” liquidation occurs after an entry has been liquidated for 90 days. Importers should monitor for these refunds and get their ACE pulls, entry packets, and payment records in order now.
Steps to take now
- Start with scoping: Pull ACE data for all entries with IEEPA chapter 99 codes; tag liquidated vs. unliquidated and note the dates of liquidation.
- Preserve rights: Protest final liquidated entries within 180 days; coordinate with counsel on test cases/CIT strategy.
- Keep banking details current: CBP refunds are issued electronically; ensure ACE/ACH set‑up or file CBP Form 4811 to route funds to the correct recipient.
- Segment duty types: Only the IEEPA additional duty portion would be in scope; standard classification duties, Section 232, Section 301, and AD/CVD amounts are not.
- Be ready for scale: Expect CBP programming and CSMS updates to dictate refund mechanics and timing.
Bottom line
As of today, 10% under Section 122 is in force through July 23 unless modified. A potential move to 15% remains possible but would require new action. This is a transitional period, not a settled framework. Importers should treat the 150-day window as a planning horizon—maintaining disciplined entry compliance, preparing for potential IEEPA refunds, and monitoring developments under Sections 301 and 232 that may shape longer-term exposure.
The environment is evolving, but precision and preparation now will reduce disruption later.
Stay informed
Developments in customs and trade continue to evolve—stay informed to be prepared:
