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Economy & Trade

Trump Tariffs Section 122 Surcharge Expires Today, Replacement Duties Begin

The Trump tariffs imposed under Section 122 of the Trade Act of 1974 expired at 12:01 a.m. eastern daylight time on Friday. The 10 percent surcharge that has applied to almost every good entering the United States since February ended on schedule, without a vote, and without anyone lifting it. That was always going to…

By Tejanshu Jaluthria · (updated )

The Trump tariffs imposed under Section 122 of the Trade Act of 1974 expired at 12:01 a.m. eastern daylight time on Friday. The 10 percent surcharge that has applied to almost every good entering the United States since February ended on schedule, without a vote, and without anyone lifting it.

That was always going to happen. Section 122 permits a surcharge of up to 15 percent for a maximum of 150 days, and extending it beyond that ceiling requires an act of Congress. The surcharge took effect on 24 February. Friday was day 150. No extension bill advanced, and none was introduced.

What is less widely understood is that the expiry of the Section 122 tariff does not mean cheaper imports. On Thursday, one day before the sunset, the Office of the United States Trade Representative issued a final determination in its forced labor investigations, setting duties on 60 economies. The measure ending and the measure arriving come from different sections of the same statute, carry different rates, and run on entirely different clocks.

Why the Section 122 tariff had a fixed expiry date

Section 122 was never intended as a durable trade policy. It exists to let a president respond quickly to what the statute calls fundamental international payments problems, and it is deliberately time limited so that a temporary response cannot become permanent without legislative consent.

The administration reached for it under pressure. On 20 February, the Supreme Court ruled by six votes to three in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act does not give the president authority to impose tariffs. Chief Justice Roberts wrote that reading the statutory power to regulate imports as including a power to tax would render part of the law unconstitutional. The reciprocal tariff regime built on that authority collapsed, leaving a question of roughly 166 billion dollars in duties already collected unresolved.

Within four days the White House invoked Section 122 instead. Proclamation 11012 set a 10 percent ad valorem surcharge on virtually all imports from 24 February. The President said publicly the following day that he intended to raise it to 15 percent, the statutory maximum. No proclamation implementing that increase was ever issued, and the operative rate stayed at 10 percent throughout the life of the Section 122 tariffs.

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What replaces the Section 122 tariffs

The Trade Representative announced affirmative determinations in forced labor investigations covering 60 economies on 2 June, publishing the proposal in the Federal Register three days later. After a comment period that drew more than 2,100 written submissions and three days of hearings in early July, Ambassador Jamieson Greer took final action on Thursday.

The structure has three tiers. Seventeen economies face 10 percent, including India, Mexico, Canada, the United Kingdom, Bangladesh, Indonesia and Pakistan. Five more, the European Union, Japan, Korea, Switzerland and Taiwan, face rates set by product and applied net of the standard Most Favoured Nation rate. Every other investigated economy, a group that includes China, faces 12.5 percent.

Certain products are carved out. The exemptions fall into five categories, covering raw materials whose taxation could cut off domestic supply, goods that could cause broad economic disruption, products the United States cannot produce or source in sufficient volume, specified goods from economies the Trade Representative wants to encourage toward adopting forced labor import bans, and articles where a duty would not realistically change the practice being targeted.

Why the Trump tariffs will not make imports cheaper today

Before Thursday, the working assumption in trade circles was that the Section 122 tariff would lapse into a gap. Capital Economics had estimated that if it expired with nothing in its place, the trade weighted average United States tariff rate would drop from roughly 13.0 percent to about 7.2 percent overnight.

That scenario no longer applies. With the Section 301 duties finalised a day before the sunset, most affected imports move from a flat 10 percent surcharge to either 10 or 12.5 percent under a different authority. For goods from the 12.5 percent group, the rate goes up rather than down.

Two further details complicate the arithmetic. The proclamation stated that the Section 122 tariffs did not apply on top of duties imposed under Section 232, so a large share of steel, aluminium, copper, automotive and semiconductor imports never carried the surcharge at all. And it came with a long exclusion list covering energy products, specified critical minerals, certain agricultural goods, pharmaceuticals and their active ingredients, aerospace products, informational materials, and goods qualifying for duty free treatment under the North American and Central American agreements. Importers of those goods will notice nothing today.

The Section 122 tariffs are still in court

The statutory expiry is separate from the litigation, which continues.

Twenty four states challenged the surcharge at the Court of International Trade in a case brought as Oregon v. United States, consolidated with a claim filed by the spice importer Burlap and Barrel. On 7 May the court held that the administration had exceeded its Section 122 authority, but the relief reached only the named plaintiffs. The Federal Circuit stayed the ruling while the government appealed, and Customs and Border Protection continued collecting from everyone else until this morning.

That posture will feel familiar. It is close to where the emergency powers tariffs sat before the Supreme Court struck them down in February and turned billions of dollars in collected duties into a refund question the Court declined to answer.

Congress moves against the tariff power behind Section 122

On Wednesday, Senator Ron Wyden introduced the Congressional Trade Powers Reform Act, which would repeal Section 122 outright and require congressional approval before a president could impose future tariffs under Sections 301, 201 or 232. The bill faces long odds in the current chamber, but its introduction two days before the sunset is a signal about where legislative attention is turning after two adverse court rulings in five months.

What to watch next

Three dated events follow this one. Mandatory country reporting for copper smelting and casting begins on 30 July. A Section 232 duty of 100 percent on patented pharmaceuticals and active pharmaceutical ingredients takes effect on 31 July. And on 19 August, three proclamations signed on 20 July impose an additional 50 percent duty on Canadian automobiles, alcoholic beverages, dairy and a broad annexed list of goods, under Section 338 of the Tariff Act of 1930. That measure carries no expiry date at all, and unlike the Trump tariffs that ended this morning, a valid North American origin certificate will not exempt a covered product.

Live rates for every current measure are maintained on our Trump Tariff Tracker, updated after each proclamation, determination and court ruling.

Sources and references

  1. Office of the United States Trade Representative, final action in the Section 301 forced labor investigations, 23 July 2026. 
  2. Proclamation 11012, Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems, The White House, 20 February 2026. Locate on federalregister.gov and link the proclamation directly.
  3. Federal Register, USTR proposed determination in the forced labor investigations, document number 2026 11296, published 5 June 2026.
  4. Customs and Border Protection, implementing guidance CSMS number 67844987. Locate on cbp.gov.
  5. Section 122 of the Trade Act of 1974, codified at 19 U.S.C. section 2132. Link to uscode.house.gov or law.cornell.edu.
  6. The Supreme Court of the United States, Learning Resources, Inc. v. Trump, decided 20 February 2026. Link the slip opinion on supremecourt.gov.
  7. Court of International Trade, Oregon v. United States, decision of 7 May 2026. Link on cit.uscourts.gov.
  8. Congressional Trade Powers Reform Act, introduced 22 July 2026. Link the bill page on congress.gov.
  1. Capital Economics estimate of the average effective tariff rate after expiry, reported July 2026.
  2. Nakachi Eckhardt and Jacobson, note on the statutory sunset and its separation from the litigation. 
  3. PwC Canada, Tax Insights on the Court of International Trade ruling.