What is the Section 122 surcharge, and when does it expire?
Section 122 of the Trade Act of 1974 lets the President impose a temporary import surcharge of up to 15% ad valorem, for a maximum of 150 days, to address "fundamental international payments problems" such as a large balance-of-payments deficit. [Bucket 1: Trade Act of 1974, §122]
That authority was used to impose a 10% surcharge on the vast majority of imported goods from all countries, effective 24 February 2026. Counting 150 days forward puts the statutory expiry at 24 July 2026. Past that point, the surcharge can only continue if Congress enacts an extension. [Bucket 1: Federal Register notice, 25 February 2026; White House presidential action]
The key word is temporary. Section 122 is built with an end date inside the statute. That makes it a different planning problem from the tariff layers that have no clock.
Why is the July 24 date uncertain?
Because a second clock is running alongside the statutory one.
On 7 May 2026, a divided three-judge panel of the U.S. Court of International Trade invalidated the 10% Section 122 surcharge. The decision is under appeal, and while that plays out, the vast majority of importers remain obligated to pay the duties. [Bucket 1: U.S. Court of International Trade ruling, 7 May 2026]
So the surcharge could come off via the statutory 150-day limit on 24 July, or the litigation could change the picture on a different timeline. For an importer, the practical posture is the same either way: assume you are paying today, and plan for the possibility that it lapses soon.
This is also why a refund posture matters. If you were paying IEEPA-era duties before the transition to Section 122, the mechanics of claiming back overpaid duty are worth understanding — see how FBA sellers file IEEPA tariff refunds via CAPE.
What is the Agence Octo Tariff-Exposure Screen?
Use this to separate the temporary layer from the durable ones, not as a customs ruling. ([Agence Octo methodology])
| Scenario | What happens | Landed-cost effect | What to pre-stage now |
|---|---|---|---|
| Lapse | Surcharge ends at the 150-day cap on 24 July with no extension | 10% comes off the affected lines; other layers remain | A "post-lapse" landed-cost sheet ready to apply; avoid pre-committing to permanent price cuts |
| Extend | Congress legislates a continuation past 24 July | 10% persists; plan as if it is structural for the extension window | A financing/cash-flow plan for duty paid at entry through the extended period |
| Litigation shift | Appeal outcome changes the surcharge's status earlier or later | Possible refund exposure or sudden removal | Clean entry records and a refund-claim posture so you can move fast |
| Tariff layer | What it covers | Status vs. July 24 | Why it matters to your model |
|---|---|---|---|
| Section 122 | 10% surcharge on most imports, all countries | Temporary — statutory cap 24 July 2026 unless extended; under appeal | This is the only layer with a near-term clock; do not treat it as permanent |
| Section 301 | China-origin goods, by HTS list | Ongoing — not affected by the 122 expiry | The durable China layer; your China+1 math should be built on this |
| Section 232 | Steel, aluminum, and their derivatives | Ongoing — category-specific | If your SKU has metal content, this can dominate the others |
| Base duty (MFN/HTS) | The normal tariff for your classification | Ongoing — unchanged | The floor everything else stacks on; confirm your HTS code is right first |
A single headline rate is not the point. The stack is the point.
Importers get hurt when they react to the most visible number — the 10% surcharge — and miss that the durable layers underneath are what actually set their long-run landed cost.
What should FBA importers do before July 24?
Do these in order.
Step 1 — Build the landed-cost model both ways. Make one sheet with the surcharge on and one with it off, holding Section 301, Section 232, and base duty constant. You want the answer ready, not improvised, on the day the picture changes. ([Agence Octo methodology])
Step 2 — Confirm your HTS classification first. Every layer stacks on the classification. A wrong HTS code makes the whole exposure model wrong, surcharge or no surcharge. ([Agence Octo methodology])
Step 3 — Time POs and customs entries against the clock. Map which shipments land before versus after 24 July, and understand how entry timing interacts with the duty you actually pay. ([Agence Octo methodology])
Step 4 — Keep clean entry records and a refund posture. Given the live appeal, the importers who recover fastest are the ones whose entry documentation is already in order. ([Agence Octo methodology])
Step 5 — Don't permanently reprice on a temporary duty. If you cut a price to absorb the surcharge, decide in advance what happens to that price if it lapses. A reflexive permanent reprice is the expensive move. ([Agence Octo methodology])
If you are pressure-testing whether a category still works at all under the current stack, see how Agence Octo's Periscope workflow tracks tariff and regulatory exposure before a SKU scales.
What does this mean for China sourcing decisions?
The surcharge changes your landed cost month to month — and that volatility, not the headline rate, is the real planning problem.
A China+1 move or a hard supplier renegotiation is a structural decision. Basing it on a duty that may lapse within weeks is how importers end up restructuring a supply chain to dodge a tariff that disappears before the new line is running. Model the structural layers — Section 301, Section 232, base duty — and let the temporary surcharge be a cash-flow and timing variable on top.
Decide on the durable number.
A supplier worth keeping at a 10%-surcharge landed cost is usually still worth keeping without it. A category that only works because the surcharge might lapse was never a stable category. The surcharge is noise on top of the signal; source on the signal.
That is why Periscope tracks the full tariff and regulatory stack before sellers scale a SKU. See Periscope.