If you import anything — inventory, raw materials, packaging, components — you've been paying an extra 10% on nearly all of it since late February. In five days, that specific charge disappears by operation of law. If your first reaction is relief, hold on: almost nothing else about your tariff exposure is going away with it.
Here's what's actually happening with the Section 122 import surcharge, why it's expiring on a fixed date instead of being repealed, and what small importers should do with the week they have left before July 24.
How We Got Here
To understand why a 10% surcharge is vanishing on a specific date rather than through a policy reversal, you have to go back to February 2026, when the Supreme Court ruled in Learning Resources that the tariffs the administration had imposed under the International Emergency Economic Powers Act (IEEPA) exceeded the President's authority. IEEPA had been the legal foundation for most of the broad-based tariffs importers had been dealing with since 2025. Once that foundation was invalidated, the administration needed a new one — fast.
It found one in Section 122 of the Trade Act of 1974, a statute Congress wrote in 1975 specifically to prevent a repeat of what happened in 1971, when President Nixon used emergency wartime powers to impose a 10% import surcharge with no defined end date. Congress's answer was to hand the President a narrower, self-limiting version of that same tool: Section 122 lets the President impose an import surcharge of up to 15% for no more than 150 days to address a serious balance-of-payments problem — full stop. No renewal without an act of Congress.
On February 20, 2026, the administration invoked that authority. A 10% ad valorem surcharge on virtually all imports took effect February 24. Run the math on "150 days from February 24" and you land on one date: July 24, 2026, at 12:01 a.m. EDT — the moment the surcharge expires automatically, whether or not anyone in Washington wants it to.
The Court Fight Nobody Needs to Wait For
Section 122 itself has been under legal attack almost since the day it was invoked. On May 7, 2026, the U.S. Court of International Trade ruled in State of Oregon v. United States that the surcharge exceeded the President's statutory authority — a separate ruling from the IEEPA case, but with an eerily similar outcome. The Department of Justice appealed immediately, and on May 12 the Federal Circuit issued an administrative stay, keeping the surcharge in effect while the appeal proceeds.
That appeal is still unresolved as of this writing, and here's the part that trips people up: it doesn't matter for the July 24 deadline. The 150-day statutory clock runs regardless of how the litigation comes out. Even if the Federal Circuit eventually sides with the administration and upholds Section 122 as constitutional, the surcharge still expires on schedule, because Congress capped it at 150 days in the text of the law itself. The court case is about something else entirely: whether the roughly five months of duties already collected have to be refunded.
What Actually Changes on July 24 — and What Doesn't
What changes: U.S. Customs and Border Protection stops collecting the 10% Section 122 surcharge on entries filed after July 23. If nothing else moves in to replace it, imports that were carrying that extra 10% go back to whatever their pre-February duty rate was.
What doesn't change automatically: your money. Expiration is not the same as a refund. The surcharge "terminates on its own terms," but that termination does not retroactively return the duties already paid on the roughly five months of entries that cleared between February 24 and July 23. Whether importers get any of that money back depends entirely on how the Federal Circuit rules in the pending appeal — and that ruling could still be months away. If you've been paying the Section 122 surcharge, the entries are a live financial claim, not a closed chapter, and they belong in your books as such until the appeal resolves.
This is exactly where the IEEPA situation offers a preview of how messy this can get. When the Supreme Court invalidated the IEEPA tariffs, the administration didn't set up an automatic refund process — it left the Court of International Trade to sort out who gets what back, and it turned out the standard customs liquidation-protest system wasn't built to handle refunds at this scale. Practically, that has meant importers with real money on the line have needed to file protective lawsuits in the CIT before their entries liquidate, or risk losing the right to claim a refund at all. There's no guarantee the Section 122 surcharge refund process — if one exists — will look any different. Any importer sitting on a meaningful five-month total of Section 122 duties should treat July 24 as a prompt to talk to a trade attorney about preserving refund rights, not as the end of the story.
Don't Mistake "Expires" for "Tariffs Are Over"
The single biggest mistake a small importer can make right now is assuming July 24 resets the board. It doesn't. Section 122 was always described by trade lawyers as a stopgap — a 150-day bridge the administration built while it stood up more durable, longer-lasting tariff authority under different statutes. Two of those are already moving:
- Section 301 forced-labor tariffs: proposed additional duties of 10–12.5% covering roughly 60 trading partners, with a public comment period that had a hearing scheduled for July 7, 2026.
- Section 232 pharmaceutical tariffs: 100% duties on patented pharmaceutical imports, phasing in July 31, 2026 for large companies and September 29, 2026 for everyone else.
The critical difference from Section 122: neither Section 301 nor Section 232 comes with a built-in 15% rate cap or a hard 150-day sunset. Section 122 expired by design, because Congress wrote the design that way in 1975. These other authorities have no such guardrail. If your business imports from a country or product category that ends up covered by a Section 301 or Section 232 action, you could see your landed costs move again within weeks of the Section 122 relief — possibly by more than 10%.
What Small Importers Should Do This Week
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Pull your actual numbers before you plan around a guess. Go through your entry summaries (CBP Form 7501s) since February 24 and total up exactly what you paid in Section 122 surcharge duties, by HTS code and by shipment. Don't estimate — that total is what a refund claim would be based on, and it's the number your tax advisor needs to evaluate whether pursuing one is worth the cost of counsel.
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Keep every record, even after the charge disappears. It's tempting to treat July 24 as a filing cutoff and archive the paperwork. Don't. If the refund fight plays out the way the IEEPA one has, you may need those entry summaries, invoices, and broker statements months from now to support a claim in the Court of International Trade.
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Model your landed costs both with and without a replacement tariff. If any of your suppliers or product categories touch the countries or goods named in the Section 301 or Section 232 actions, run your numbers assuming those additional duties land on your specific imports. A pricing conversation with a supplier or a customer is much easier to have proactively than after an invoice already reflects a new surcharge.
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Check your supply agreements for tariff pass-through language. If a contract was written or renegotiated with the Section 122 rate baked in, confirm whether it automatically adjusts when that rate changes — in either direction.
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Separate "tariff as a cost" from "tariff as a receivable" in your books. Duties you've paid that might be refunded aren't the same thing, financially, as duties that permanently raised your cost of goods sold. Lumping them together makes it hard to see your true margin and easy to lose track of a claim you're entitled to pursue.
Why the Bookkeeping Discipline Matters Here
Tariff swings like this one are a good stress test for how granular your financial records actually are. If your books show "customs duties" as one lump expense account, you have no way to answer the question a trade attorney will ask first: how much Section 122 surcharge, specifically, did you pay, and on which entries? Tracking duties at the shipment or HTS-code level — not just as a monthly total — is what turns "we think we paid a lot in tariffs this year" into a defensible number you can act on, whether that means pursuing a refund claim or renegotiating a supplier contract.
This is one of the places plain-text accounting earns its keep. Because Beancount.io stores every transaction as auditable, version-controlled plain text, you can tag individual import duty line items — by shipment, by HTS code, by statutory authority — and query them later with the same precision you recorded them with, instead of reconstructing the story from a stack of CBP forms after the fact. Get started for free and keep your import costs as traceable as the trade law that created them.