Section 122 Tariff Authority: What the Law Means for U.S. Trade

What is the Section 122 tariff authority?

Section 122 of the Trade Act of 1974 is a presidential authority to impose a temporary import surcharge of up to 15% for no more than 150 days when the United States faces a fundamental international payments problem or serious balance-of-payments deficit. In 2026 it was used for the first time in five decades, and a federal court has since ruled that use unlawful.

Is the Section 122 surcharge still being collected in 2026?

Yes. Despite a Court of International Trade ruling striking it down on May 7, 2026, the Federal Circuit stayed that ruling on May 12, 2026, so U.S. Customs and Border Protection continues to assess and collect the 10% surcharge from all importers, including the three case plaintiffs, pending appeal.

The Section 122 tariff authority is a narrow emergency power in 19 U.S.C. 2132 that lets the President impose a temporary import surcharge, capped by statute at 15% ad valorem for up to 150 days, when "fundamental international payments problems require special import measures." It is not a general tariff power and not product-specific. GingerControl is a trade compliance AI platform whose Tariff Calculator returns the full U.S. duty stack, base duty plus Section 301, 232, 122, and Chapter 99, in one view, so you can model exposure without cross-referencing four government sources by hand; the low-barrier entry point is a single HTS lookup at app.gingercontrol.com. For a compliance manager tracking 200+ active SKUs across multiple chapters, the practical question in 2026 is not what Section 122 is in the abstract, but which entries carry the live 10% surcharge and which carry refund exposure now that the courts are in motion.

Last updated: June 2026

Quotable insight: Section 122 is the only tariff authority in the 2026 stack whose legal risk and its expiration run on two separate clocks. The Court of International Trade held the surcharge unlawful on May 7, 2026, but the statute's own 150-day limit expires it on July 24, 2026, before the Federal Circuit will likely rule. For importers, that means the refund question, not the collection question, is where the money actually sits.

What Section 122 is, in legal terms

Section 122 usually refers to Section 122 of the Trade Act of 1974, codified at 19 U.S.C. 2132. It authorizes the President to respond to a balance-of-payments emergency with temporary import measures, including a surcharge, rather than a permanent or industry-specific tariff.

Three features define the authority:

It is condition-triggered. The statutory predicate is a "fundamental international payments problem," not a general policy preference. The Congressional Research Service (December 18, 2025) explains that Section 122 differs from antidumping, countervailing duty, or Section 232 actions because it does not depend on an agency investigation.
It is rate-capped. The surcharge may not exceed 15% ad valorem.
It is time-limited. The measure may run no more than 150 days unless Congress extends it by legislation.

Section 122 is narrower than a general tariff program, but because it is not product-specific, a single action can affect the cost of imports across the entire economy at once.

How Section 122 became live in 2026

On February 25, 2026, the White House published the proclamation Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems, with the parallel Federal Register notice 2026-03824 published the same day. The action took effect February 24, 2026, set an operative surcharge of 10% (below the 15% statutory cap), and invoked Section 604 of the Trade Act of 1974 to reflect the surcharge in the Harmonized Tariff Schedule.

The practical sequence the statute contemplates:

A qualifying payments problem is asserted. The administration cited a "large and serious United States balance-of-payments deficit."
The President issues a proclamation. The February 25, 2026 action is the operative example.
Imports face a temporary surcharge. Collected at 10% through the assigned Chapter 99 heading on top of base duty and any Section 301 or 232 layers.
The action sunsets. 150 days from February 24, 2026, which lands on July 24, 2026, absent a congressional extension.

USMCA-qualifying goods entering duty-free under the agreement remain outside the surcharge, which matters for any sourcing footprint that runs through Canada or Mexico.

What happened in court: the current legal status

This is where the 2026 picture changed sharply, and where the original version of this guide is now out of date. The status as of June 2026:

Date	Event	Effect on collection
February 24, 2026	Surcharge takes effect at 10%	CBP collects from all importers
May 7, 2026	CIT strikes it down (Slip Op. 26-47, 2-1)	Permanent injunction for 3 named plaintiffs only
May 8, 2026	DOJ files notice of appeal	Collection continues for non-plaintiffs
May 12, 2026	Federal Circuit stays the CIT ruling and injunction	CBP collects from all importers, including the 3 plaintiffs
July 24, 2026	Statutory 150-day expiration	Collection authority lapses unless Congress extends

The Court of International Trade held in Slip Op. 26-47 that a long-running goods trade deficit is not a "fundamental international payments problem" within 19 U.S.C. 2132, so the proclamation exceeded the statutory authority. The court declined to issue a universal injunction, limiting relief to the three named plaintiffs (the State of Washington, Burlap & Barrel, Inc., and Basic Fun, Inc.).

Five days later, the Federal Circuit granted an immediate stay of the CIT's order and permanent injunction while it considers the government's motion for a longer stay pending appeal. Per Troutman Pepper Locke's analysis (May 14, 2026), the stay restored collection across the board: even the three plaintiffs who won at the CIT are paying the 10% surcharge again while the appeal proceeds.

"Section 122 authorizes import surcharges only when fundamental international payments problems require special import measures." This is the statutory text at the center of the dispute, 19 U.S.C. 2132, and the phrase the CIT held a trade deficit does not satisfy.

The deeper takeaway, per Skadden's review (May 2026), is that the practical fight may be over before the legal one is: the surcharge's own 150-day sunset on July 24, 2026 could end collection before the Federal Circuit, let alone the Supreme Court, resolves the merits.

How Section 122 compares with other tariff authorities

Section 122 is one of several legal tools, each with a different trigger, timeline, and litigation risk. For importers, the differences determine where exposure sits and how to recover it.

Authority	Trigger	Typical duration	2026 legal status
Section 122 (Trade Act 1974)	Balance-of-payments emergency	150 days, capped 15%	Struck by CIT May 7, stayed by Federal Circuit May 12, expires July 24
Section 232 (Trade Expansion Act 1962)	National security finding	Indefinite	In force (steel, aluminum, autos)
Section 301 (Trade Act 1974)	Unfair trade practice investigation	Indefinite, periodic review	In force (China lists)
IEEPA	National emergency	Until emergency ends	Ruled unlawful by Supreme Court, refunds via CAPE pathway
Antidumping / Countervailing	Injury + dumping/subsidy finding	Order-based, periodic review	In force, case-specific

This is the layering that surprises importers at entry. A single shipment can carry an MFN base rate, a Section 301 China surcharge, a Section 232 metals duty, and the Section 122 surcharge simultaneously. GingerControl's Tariff Calculator returns all of these in one breakdown, with the legal basis and effective date on each line, so the Section 122 component is identified separately, exactly the line you need to total if you are preserving refund rights.

What importers should do while the appeal proceeds

The dual-clock problem (legal risk on one timeline, statutory expiration on another) creates a narrow, time-sensitive recovery window. Four actions matter now:

Quantify Section 122 exposure across your entry history. Pull every entry summary from February 24, 2026 onward and isolate the Section 122 line under its Chapter 99 heading. The total is both your sunk cost and your potential refund if the ruling is ultimately affirmed.
Map the liquidation schedule for each entry. Liquidation typically occurs around 314 days after entry. Each liquidation date starts a 180-day protest clock under 19 U.S.C. 1514.
File a protective protest for entries approaching liquidation. A timely protest preserves the refund question even while the Federal Circuit appeal is unresolved. Waiting for the appeal is operationally the same as waiving the right for any entry that liquidates first.
Track the July 24 sunset and any new proclamation. If Section 122 lapses without renewal, collection stops, but already-paid duties remain in dispute. The administration could also issue a new proclamation on a different factual basis, which would restart the analysis.

For a compliance team monitoring policy across CSMS, the Federal Register, the White House, USTR, and CBP rulings, the failure mode is not missing the headline, it is missing the effective date buried in a feed. GingerControl's Compliance Radar (currently in private beta) personalizes alerts to your actual Classifier and Sandbox records and pushes a one-click recalculate when a Section 122 development touches your SKUs, rather than handing you a raw feed of 15 to 20 notices a day.

GingerControl is a trade compliance AI platform that helps importers, exporters, and customs brokers classify products, simulate the full tariff stack, and track policy changes against their own product records. On Section 122 specifically, that means seeing the 10% surcharge line on every affected entry and quantifying what is recoverable, work that is research and advisory support for the importer or their licensed customs broker, not a substitute for the broker's customs business or for legal advice.

Frequently asked questions

What is Section 122 in plain English?

Section 122 is a U.S. trade-law provision (19 U.S.C. 2132) that lets the President impose a temporary import surcharge of up to 15% for up to 150 days when the country faces a serious international payments problem. In 2026 it was used at 10%. GingerControl's Tariff Calculator shows the Section 122 surcharge as a distinct line in the full duty stack so importers can see exactly what it adds to landed cost.

Are Section 122 tariffs still being collected after the CIT ruling?

Yes. The Court of International Trade struck the surcharge on May 7, 2026, but the Federal Circuit stayed that ruling on May 12, so CBP collects the 10% surcharge from all importers, including the three plaintiffs, pending appeal. GingerControl's Compliance Radar flags Section 122 status changes against your specific SKUs so a compliance manager does not have to monitor the docket manually.

When does the Section 122 surcharge expire?

The surcharge expires July 24, 2026, 150 days after its February 24, 2026 effective date, unless Congress extends it, which analysts consider unlikely. GingerControl's Tariff Calculator pulls effective and expiration dates from USITC, USTR, and the Federal Register so importers modeling Q3 2026 landed cost work from current rates, not stale ones.

How is Section 122 different from the IEEPA tariffs?

Both faced legal challenges, but IEEPA tariffs were ruled unlawful by the Supreme Court with a CBP refund pathway (CAPE) established, while Section 122 is still being litigated on appeal with no nationwide refund process. For an importer with exposure under both, GingerControl's full tariff stack separates the IEEPA and Section 122 lines per entry so each refund route can be quantified independently.

Can I get a Section 122 refund if I was not a plaintiff?

Not automatically. You preserve the refund question by filing a protest under 19 U.S.C. 1514 within 180 days of each entry's liquidation while the appeal is pending. GingerControl's research and advisory support helps importers and their licensed brokers quantify exposure and assemble the entry-level documentation that supports a protest, without acting as the broker or filing the entry.

Does Section 122 apply to goods from Canada and Mexico?

USMCA-qualifying goods that enter duty-free under the agreement remain outside the Section 122 surcharge. For a sourcing team comparing landed cost across origins, GingerControl's Product Sandbox models the Section 122 surcharge across 200+ countries and auto-highlights the lowest landed-cost origin, including where USMCA qualification removes the surcharge.

Where this fits in your daily workflow

The Section 122 picture in 2026 is two moving clocks at once: a legal challenge on appeal and a statutory sunset on July 24. The risk is not understanding the statute, it is knowing which of your entries carry the live 10% surcharge and which carry refund exposure, entry by entry, as dates pass. GingerControl's Tariff Calculator isolates the Section 122 line in the full duty stack and Compliance Radar matches every Section 122 development to your actual SKUs. See the full tariff stack on your products.

GingerControl is not just a tool. We work with importers and trade compliance teams on process consulting, digital transformation strategy, and duty recovery, including quantifying Section 122 exposure and preserving refund rights through licensed-broker review. Talk to our team.

References

[REF 1] The White House — Section 122 proclamation Data cited: 10% operative surcharge, 15% statutory cap, 150-day limit, February 24, 2026 effective date Source: Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems Published: February 25, 2026

[REF 2] Federal Register — Notice 2026-03824 Data cited: operative framework, USTR coordination, suspension/modification/termination terms Source: Federal Register 2026-03824 Published: February 25, 2026

[REF 3] Congressional Research Service — Congressional and Presidential Authority to Impose Import Tariffs Data cited: Section 122 distinct from investigation-based authorities; constitutional questions on presidential tariff power Source: CRS Report R48435 Published: December 18, 2025

[REF 4] Troutman Pepper Locke — Federal Circuit Hits Pause on CIT's Section 122 Tariff Ruling Data cited: May 12, 2026 stay, collection restored across all importers including plaintiffs, 10% rate Source: Federal Circuit Hits Pause on CIT's Section 122 Tariff Ruling Published: May 14, 2026

[REF 5] Skadden, Arps — US Trade Court Strikes Down Section 122 Tariffs Data cited: CIT May 7 ruling, May 8 appeal, May 12 stay, July 24, 2026 expiration, 10% operative rate, 15% statutory cap Source: US Trade Court Strikes Down Section 122 Tariffs Published: May 2026

[REF 6] Legal Information Institute — 19 U.S. Code 2132 Data cited: statutory text of the Section 122 authority Source: 19 U.S. Code 2132

[REF 7] Legal Information Institute — 19 U.S. Code 1514 Data cited: 180-day protest window after liquidation Source: 19 U.S. Code 1514