The Section 122 surcharge is a short-duration tariff tool, not a stable long-term trade regime. The current 10% ad valorem surcharge took effect for covered entries on February 24, 2026, and the governing proclamation says the HTSUS modifications “shall continue in effect through 12:01 a.m. eastern daylight time on July 24, 2026,” unless earlier changed or extended by Congress (The White House, Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems — February 21, 2026). Section 122 itself allows a surcharge up to 15% for no more than 150 days unless extended by an Act of Congress, a limit the proclamation expressly acknowledges (The White House, Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems — February 21, 2026).
For multinational corporations, the correct response is not to bet on a clean tariff rollback. The better posture is to treat July 24 as a tariff-regime conversion date: Section 122 may lapse by operation of law, but replacement measures under Section 301 and Section 232 could preserve, narrow, or even increase the duty burden on particular countries and products. Trade-law practitioners report that USTR has active Section 301 investigations covering structural excess capacity, forced labor, Vietnam IP practices, and Brazil-related trade practices, with forced-labor duties proposed at 10% or 12.5% and a July 6 comment deadline / July 7 hearing window close to the Section 122 expiration date (81. July 6, 2026 | Emerging Tariff Framework Post-Section 122 | Thompson Coburn LLP – JDSupra; Trump Tariffs: Upcoming Deadlines | Brownstein).
The practical mandate is clear: preserve customs refund rights, model multiple duty-rate outcomes, avoid shipment-timing bets that depend on one legal outcome, and give procurement, finance, legal, tax, trade compliance, and government affairs a single escalation process.
What Happens When Section 122 Tariffs Expire?
The current Section 122 action is governed by Proclamation 11012. It imposes a 10% ad valorem duty rate on covered imports, in addition to other duties, taxes, fees, exactions, and charges, except where the proclamation provides otherwise (The White House, Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems — February 21, 2026). The proclamation excludes categories including specified critical minerals, energy products, certain agricultural products, pharmaceuticals and pharmaceutical ingredients, certain electronics, vehicles and parts, aerospace products, informational materials, donations, accompanied baggage, USMCA duty-free Canada/Mexico goods, DR-CAFTA duty-free textile and apparel goods, and goods subject to Section 232 tariffs (The White House, Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems — February 21, 2026).
For customs operations, the most important language is the entry-date rule. The proclamation applies to goods “entered for consumption, or withdrawn from warehouse for consumption,” on or after 12:01 a.m. EST on February 24, 2026, and continuing through 12:01 a.m. EDT on July 24, 2026, unless suspended, modified, terminated earlier, or extended by Congress (The White House, Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems — February 21, 2026).
Operational implication: goods entered before the deadline remain exposed to the surcharge if covered; goods entered after the deadline should not be subject to the Section 122 surcharge absent congressional extension or a new legal instrument. But that does not mean the goods will face no new tariff. A replacement Section 301 or Section 232 measure could apply on or near the same date.
Will Congress Extend Section 122 Tariffs?
Congress has Section 122-related bills pending, but the retrieved legislative record does not show an enacted extension. The most direct repeal measure is the Reclaim Trade Powers Act, S. 4049, which would repeal Section 122 and was read twice and referred to the Senate Finance Committee on March 11, 2026 (S. 4049 — 119th Congress). The House companion, H.R. 2459, would likewise repeal Section 122 and was referred to the House Ways and Means Committee on March 27, 2025 (H. R. 2459 — 119th Congress).
Other pending bills would narrow or condition the tariff’s impact rather than extend it. S. 4038, the Small Business Liberation 2.0 Act, would exempt small businesses from Section 122 duties and require refunds for covered duties paid by small businesses, but it was only introduced and referred to Senate Finance (S. 4038 — 119th Congress). S. 4418 and H.R. 8583 would bar Section 122 or Section 301 duties on Moroccan phosphate fertilizers, but those measures were also introduced and referred rather than enacted (S. 4418 — 119th Congress; H. R. 8583 — 119th Congress).
Government affairs takeaway: monitor congressional action, but do not make procurement or pricing plans that depend on a clean statutory extension. The stronger working assumption is that the administration will try to maintain tariff pressure through other authorities, especially Section 301 and Section 232.
Section 122 Tariff Lawsuits: What Importers Should Know
The Section 122 surcharge is already in litigation. On May 7, 2026, the U.S. Court of International Trade ruled in a 2-1 decision that Proclamation 11012 lacked a valid statutory justification under Section 122, but the court limited relief to the two private importer plaintiffs and the State of Washington and did not stop collection from other importers (Cozen O’Connor: U.S. Court of International Trade Rules President’s Section 122 Tariffs Unlawful [Alert]). The CIT ordered refunds with interest for the successful plaintiffs, but the government appealed to the Federal Circuit on May 8, 2026 (Cozen O’Connor: U.S. Court of International Trade Rules President’s Section 122 Tariffs Unlawful [Alert]).
On May 12, 2026, the Federal Circuit granted an immediate stay of the CIT order and injunction while considering the government’s request for a stay pending appeal, leaving CBP collection unchanged for non-party importers and suspending even the plaintiff-specific relief while the appeal proceeds (Federal Circuit Hits Pause on CIT’s Section 122 Tariff Ruling – Troutman Pepper Locke). As a result, importers should continue treating the 10% surcharge as applicable to covered entries until the expiration date or an official change, while preserving records and deadlines for potential refunds (Federal Circuit Hits Pause on CIT’s Section 122 Tariff Ruling – Troutman Pepper Locke).
Trade compliance takeaway: litigation may create future refund opportunities, but it does not justify nonpayment, under-accrual, or informal entry workarounds. Maintain entry-level data for every Section 122 payment, including importer of record, entry number, HTSUS line, country of origin, duty amount, liquidation status, protest deadline, broker, and business unit.
Section 122 Customs Compliance: Entry Timing, HTS Reporting, and FTZ Rules
The proclamation provides several concrete compliance rules. It states that the surcharge is treated as a “regular customs duty,” does not stack on goods subject to Section 232 tariffs, and must be applied to the non-Section 232 portion of an import where only part of the import is subject to Section 232 (The White House, Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems — February 21, 2026). It also requires covered merchandise admitted into a U.S. foreign-trade zone on or after the effective date to be admitted in privileged foreign status unless eligible for domestic status (The White House, Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems — February 21, 2026).
FTZ Board notices through July confirm that agencies continue to treat Section 122 as relevant to FTZ admissions. For example, a July 1, 2026 FTZ notice for Corning Optical Communications states that optical fiber may be subject to Section 122 depending on country of origin and that applicable Section 122 decisions require subject merchandise to be admitted in privileged foreign status under 19 CFR 146.41 (Notice — Foreign-Trade Zone (FTZ) 57, Notification of Proposed Production Activity; Corning Optical Communications LLC; (Fiber Optic Cables); Newton and Hickory, North Carolina). A July 17, 2026 FTZ notice for Oerlikon Metco similarly references Section 122 and Section 301 duties and the privileged-foreign-status requirement (Notice — Foreign-Trade Zone (FTZ) 37, Notification of Proposed Production Activity; Oerlikon Metco (US) Inc.; (Surface Coatings and Application Equipment); Westbury, New York).
Low-value import programs are also shifting. CBP’s June 24, 2026 final rule suspending de minimis treatment for postal shipments references Proclamation 11012 and explains that the interim postal duty rate was tied to the expiration date of the Section 122 surcharge or the new postal-entry process, whichever occurred first (Rule — Indefinite Suspension of the De Minimis Exemption for Mail Shipments and New Postal Informal Entry Process). CBP also issued a companion rule suspending the de minimis administrative exemption for non-postal shipments, requiring formal or informal entry for low-value shipments arriving outside the international postal network (Regulation — Indefinite Suspension of the De Minimis Exemption for Merchandise Arriving Through All Modes Other Than the International Postal Network).
Compliance checklist for July 20–31:
Lock entry-date controls. Require daily broker reporting for entries expected between July 22 and July 26, because the difference between entry before and after 12:01 a.m. EDT on July 24 may determine Section 122 liability under the proclamation (The White House, Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems — February 21, 2026).
Validate Section 232 overlap. Since the proclamation says Section 122 does not apply in addition to Section 232 tariffs, confirm that brokers are not over-collecting on tariff lines already covered by Section 232 (The White House, Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems — February 21, 2026).
Preserve protest windows. Trade counsel has advised importers to monitor liquidation, protest, and post-summary-correction deadlines to preserve refund opportunities if the courts later invalidate Section 122 duties more broadly (Federal Circuit Hits Pause on CIT’s Section 122 Tariff Ruling – Troutman Pepper Locke).
Retain proof for exclusions. The proclamation’s exemptions are product- and origin-sensitive, including USMCA and DR-CAFTA treatment, so importers should maintain origin certificates, qualification files, product specifications, and HTS analyses (The White House, Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems — February 21, 2026).
Review de minimis channel strategy. CBP’s June 2026 de minimis rules alter low-value postal and non-postal entry treatment, which matters for e-commerce, spare parts, samples, returns, and decentralized fulfillment models (Rule — Indefinite Suspension of the De Minimis Exemption for Mail Shipments and New Postal Informal Entry Process).
What Could Replace Section 122 Tariffs? Section 301 and Section 232 Explained
The administration’s likely replacement path is not a single clean successor tariff. It is more likely to be a layered structure: country-specific Section 301 measures, sector-specific Section 232 measures, negotiated carveouts, and product exclusions.
Trade-alert coverage identifies four Section 301 tracks relevant to the post-Section 122 regime: March 11 investigations into structural excess capacity involving China, the EU, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India; March 12 forced-labor investigations covering 60 countries with proposed 10% or 12.5% rates; a May 29 Vietnam IP investigation; and a June 1 Brazil investigation with a proposed 25% tariff (81. July 6, 2026 | Emerging Tariff Framework Post-Section 122 | Thompson Coburn LLP – JDSupra). Brownstein’s June 24 tariff-deadline alert highlights the same near-term engagement calendar, including July 1 comments for Brazil, July 2 comments for Vietnam IP, July 6 comments for forced-labor imports, and July 7 hearings for forced-labor imports (Trump Tariffs: Upcoming Deadlines | Brownstein).
Companies should also monitor Section 232. Brownstein’s deadline tracker identifies Section 232 investigation milestones for robotics and industrial machinery and medical equipment, with Commerce reports due to the president on June 23, 2026 (Trump Tariffs: Upcoming Deadlines | Brownstein). Thompson Coburn’s July 6 alert notes that existing Section 232 measures already cover auto parts, steel, aluminum, copper, timber, lumber, and certain wood products, and that some tariff-related commitments with Taiwan adjusted Section 232 rates and created refund implications for qualifying entries since May 1, 2026 (81. July 6, 2026 | Emerging Tariff Framework Post-Section 122 | Thompson Coburn LLP – JDSupra).
Government affairs teams should monitor:
- USTR Federal Register notices and docket deadlines for Section 301 final determinations, product annexes, effective dates, stacking rules, exclusions, and in-transit provisions (Trump Tariffs: Upcoming Deadlines | Brownstein).
- Commerce Section 232 investigation outputs, presidential proclamations, and HTSUS modifications for covered sectors (Trump Tariffs: Upcoming Deadlines | Brownstein).
- Federal Circuit orders in the Section 122 appeal and any Supreme Court emergency applications or petitions (Federal Circuit Hits Pause on CIT’s Section 122 Tariff Ruling – Troutman Pepper Locke).
- CBP CSMS messages, ACE guidance, liquidation instructions, refund procedures, and post-summary-correction guidance.
- Congressional markup activity in Senate Finance and House Ways and Means on repeal, extension, exemptions, or replacement tariff authorities (S. 4049 — 119th Congress; H. R. 2459 — 119th Congress).
How Procurement Teams Should Prepare for the End of Section 122 Tariffs
Tariff uncertainty is now a procurement variable, not just a legal issue. The 2026 Thomson Reuters Global Trade Report found that 72% of trade professionals identified U.S. tariff volatility as the most impactful regulatory change, up from 41% the prior year, and that supply chain management was cited as a dominant strategic priority by 68% of respondents, nearly double the prior year’s 35% (The 2026 supply chain challenge: Global trade disruption). The same report found that the most common tariff mitigation strategies were changing sourcing patterns, cited by 65% of respondents; renegotiating supplier contracts, cited by 57%; and nearshoring or moving manufacturing back to the United States, cited by 51% (The 2026 supply chain challenge: Global trade disruption).
This argues for a three-scenario procurement model:
Scenario A: Congress extends or replaces Section 122
This is the continuity scenario. Landed costs remain close to the current baseline, and procurement should focus on cost-sharing, price-locks, and contract pass-through clauses. But because the retrieved legislative record shows repeal and exemption bills rather than an enacted extension, procurement should not over-weight this scenario (S. 4049 — 119th Congress; S. 4038 — 119th Congress).
Scenario B: Section 301 / Section 232 replacement
This is the most operationally complex scenario. A company may lose the broad 10% Section 122 surcharge but gain a country-specific 10%, 12.5%, or 25% Section 301 duty, or a sectoral Section 232 tariff, depending on origin and product classification (81. July 6, 2026 | Emerging Tariff Framework Post-Section 122 | Thompson Coburn LLP – JDSupra). Procurement must map exposure by HTS code, country of origin, supplier, sub-tier supplier, and customer contract.
Scenario C: Tariff vacuum / reversion to MFN for uncovered goods
This is the upside-cost scenario for products not covered by replacement actions. But it is unstable because Section 301 and Section 232 measures may be finalized shortly before or after July 24, and sectoral investigations can create staggered duty increases. Procurement should avoid inventory decisions that assume this scenario will last.
Recommendation: use a “tariff exposure index” by SKU and supplier. Rank each item by annual spend, gross margin sensitivity, tariff exposure, substitutability, qualification lead time, customer pass-through rights, and customs audit risk. This is preferable to a simple country-of-origin heat map because replacement measures are likely to be both origin-specific and product-specific.
Supply Chain Strategy After Section 122 Tariff Expiration
Broad-based tariffs have pushed companies toward diversification, nearshoring, and supplier renegotiation, but these moves take time. WITA’s economic analysis notes that firms are planning supply-chain diversification but that “factory and supply chain sourcing decisions cannot be changed at moment’s notice” (Washington International Trade Association, Tariffs: Estimating the Economic Impact of the 2025 Measures and Proposals – WITA — April 2, 2025). The ICC’s 2025 survey of 448 companies across 68 countries found that 64% cited increased costs, 47% cited planning uncertainty, and 45% cited supply-chain disruptions as top concerns after new U.S. tariff measures (International Chamber of Commerce, ICC Pulse Survey 2025: Business reactions to new U.S. tariffs – ICC – International Chamber of Commerce — April 25, 2025).
Sector evidence points in the same direction. IPC’s May 2025 electronics survey reported that 53% of electronics manufacturers said tariff uncertainty was delaying investment or sourcing decisions, 52% were adding tariff costs as a separate invoice line item, and 38% were rolling tariff costs into overall prices (Irish National Caucus, Electronics Industry Demand Holds Steady Amid Tariff Turbulence — May 22, 2025). Thomson Reuters found that tariffs are pushing companies to treat supplier reliability, customs delays, and raw-material cost increases as enterprise risks rather than ordinary procurement fluctuations (The 2026 supply chain challenge: Global trade disruption).
Supply-chain actions for multinationals:
- Map sub-tier suppliers. Tariff exposure often sits below the Tier 1 supplier, especially for electronics, machinery, medical devices, and automotive inputs.
- Avoid undocumented origin shifts. Replacement tariffs will increase incentives for transshipment and origin misstatement, and companies should assume CBP scrutiny will rise as tariff differentials widen.
- Use FTZs carefully. FTZs may help with duty deferral and manufacturing flexibility, but the proclamation and FTZ notices require privileged foreign status for Section 122-covered merchandise, limiting some planning benefits (The White House, Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems — February 21, 2026; Notice — Foreign-Trade Zone (FTZ) 57, Notification of Proposed Production Activity; Corning Optical Communications LLC; (Fiber Optic Cables); Newton and Hickory, North Carolina).
- Use dual-source qualification before rerouting volume. A supplier shift that lowers duty but fails quality, forced-labor, cybersecurity, or delivery requirements may create more risk than it removes.
Pricing Strategies for Businesses After Section 122 Tariffs
Tariffs create margin pressure, but companies differ in their ability to pass costs through. Thomson Reuters reports that 39% of trade professionals say their organizations are absorbing or considering absorbing tariff costs rather than passing them to customers, up from 13% the prior year (The 2026 supply chain challenge: Global trade disruption). IPC reports that electronics manufacturers expect more than two-thirds of announced tariffs to be paid by consumers, while many firms are using separate invoice line items or embedded price increases (Irish National Caucus, Electronics Industry Demand Holds Steady Amid Tariff Turbulence — May 22, 2025).
Public-company filings show the same pattern. Calix disclosed that significant new tariffs on goods imported into the United States would increase costs for products and components sourced outside the United States, increasing cost of revenue and reducing gross margin (CALIX, INC 10-K). Karat Packaging disclosed that negotiated sales contracts and market conditions can limit its ability to raise prices and pass through cost inflation, with lags between cost inflation and price increases negatively affecting gross margin (Karat Packaging Inc. 10-K). Kura Sushi disclosed that tariffs are expected to continue affecting food and beverage costs, construction and equipment costs, and restaurant operating costs throughout fiscal 2026 (KURA SUSHI USA, INC. 10-K).
Pricing recommendation: adopt a segmented pricing playbook.
- For B2B contracts with clear tariff pass-through language, use transparent surcharge line items tied to HTS code and duty rate.
- For retail or consumer-facing products, prioritize price increases on low-elasticity SKUs and protect traffic-driving SKUs where possible.
- For long-cycle projects, add tariff-change clauses, change-in-law clauses, duty true-up mechanisms, and reopener rights.
- For regulated or reimbursement-sensitive sectors, treat tariffs as margin risk rather than fully recoverable cost.
This is preferable to across-the-board price increases because replacement tariffs may be uneven by product, country, and effective date.
How Executive Teams Should Prepare for Post-Section 122 Tariffs
The strongest evidence from corporate and survey sources is that tariff uncertainty has become cross-functional. Thomson Reuters reports that 43% of trade professionals experienced enhanced influence over procurement decisions and 37% reported more frequent involvement in executive decision-making, while more than half expect collaboration with other departments to grow over the next 12 months (The 2026 supply chain challenge: Global trade disruption). WITA similarly reports that tariff uncertainty affects hiring, investment, sourcing decisions, and demand expectations, not only customs costs (Washington International Trade Association, Tariffs: Estimating the Economic Impact of the 2025 Measures and Proposals – WITA — April 2, 2025).
Recommended governance model:
- Government affairs: track USTR, Commerce, White House, and congressional signals; coordinate comments and coalition advocacy.
- Trade compliance: maintain HTS/origin/valuation controls, entry records, liquidation status, protest calendars, and refund files.
- Procurement: model supplier and SKU exposure, renegotiate contracts, and qualify alternatives.
- Finance: update accruals, margin forecasts, transfer-pricing assumptions, and cash-flow impacts.
- Legal: review pass-through clauses, force majeure, change-in-law provisions, customer notice obligations, and litigation participation.
- Executive leadership: approve scenario triggers, pricing moves, inventory acceleration, and public-company disclosure language.
Bottom Line: How Businesses Should Prepare for the End of Section 122 Tariffs
Multinationals should treat July 24 as a controlled-risk transition, not a tariff holiday. The official Section 122 instrument points to expiration at 12:01 a.m. EDT on July 24 absent congressional extension, but litigation, Section 301 investigations, Section 232 sectoral actions, de minimis changes, and CBP implementation choices make the post-July 24 landscape uncertain (The White House, Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems — February 21, 2026; Rule — Indefinite Suspension of the De Minimis Exemption for Mail Shipments and New Postal Informal Entry Process).
The best-prepared companies will not simply accelerate or delay shipments. They will run scenario models, preserve refund rights, tighten origin and HTS controls, renegotiate supplier and customer terms, and keep executive leadership close enough to make rapid pricing and sourcing decisions when replacement measures are finalized.