Section 122 Tariff Expires July 24: What Importers Do Now

Eleven days from now, on July 24, the 10% global tariff sitting on top of nearly every import entry since February disappears. Not because a judge finally struck it down, and not because the administration had a change of heart, but because a 1974 law says it has to. Section 122 caps the surcharge at 150 days, and the clock runs out on July 24, 2026.1

If you've been budgeting around that 10% since February, this sounds like good news. It might be. But before you rebuild your Q3 pricing model around a tariff-free world, you should know two things: the fight over the last five months of surcharge isn't over, and the administration is already lining up a replacement that could land within weeks of the old one expiring.

Why Section 122 Expires on Its Own

We covered how the 10% surcharge got here back in May: after the Supreme Court struck down the IEEPA tariffs, the administration reached for Section 122 of the Trade Act of 1974, a provision that lets the President impose a temporary import surcharge of up to 15% to address a "fundamental international payments problem." Proclamation 11012 set the rate at 10%, effective February 24.

The catch, and the reason this deadline is real, is that Section 122 was never meant to be permanent. The statute caps the surcharge at 150 days unless Congress votes to extend it, and nobody expects that vote. That puts the hard expiration at July 24. Short of new legislation, U.S. Customs and Border Protection has no legal basis to keep collecting the 10% on entries filed after that date.1

That's separate from the court fight we wrote about in May. The Court of International Trade ruled the surcharge unlawful on May 8, but a Federal Circuit stay kept CBP collecting it from everyone except the named plaintiffs while the appeal plays out.2 That appeal is still pending. If you're still waiting on a refund decision, keep waiting, and keep filing protests on every entry where you paid the 10%. The statutory expiration doesn't resolve whether the first five months were ever collected lawfully. It just stops new collection going forward.3

Don't Celebrate Yet: The Next Tariff Is Already Drafted

Here's the part that should keep you from popping champagne on July 25. While Section 122 winds down, USTR has been building the next tariff action, and it targets a much wider set of countries.

In June, USTR issued findings in 60 separate Section 301 investigations into countries that fail to prohibit imports of goods made with forced labor. The proposed remedy: an additional 10% duty on the 14 economies with at least a partial forced-labor import ban, and 12.5% on the other 46, a group that includes several major sourcing countries.4 USTR held public hearings on the proposal on July 7, right after comments closed.4 Trade groups are already telling members to expect the new tariffs to take effect as early as August, just weeks after Section 122 sunsets.5

Line up the dates and the picture is clear: a 10% tariff you've been paying since February goes away on July 24, and a 10 to 12.5% tariff on many of the same trade lanes could take its place before Labor Day. For an importer, that's not tariff relief. That's a two-week gap in the rain.

The Market Already Knows

You can see this playing out in the numbers. Imports through major U.S. container ports are on pace to hit 2.47 million TEUs in July, breaking the previous monthly record of 2.4 million TEUs set in May 2022.6 Retailers and importers are front-loading hard, pulling inventory in now while the Section 122 rate is known and before a forced-labor tariff potentially resets the math in August.5 The National Retail Federation expects the surge to reverse just as fast, with August volumes projected to drop about 4.5% year over year once the frontloaded inventory clears customs.5

That pattern is worth watching even if you're not moving container volumes at retailer scale. When the market frontloads this aggressively, capacity typically tightens and rates spike in the weeks right before the deadline, then go slack right after. If you have flexibility on when a shipment leaves origin, the ports are telling you the crowd already made its move for July. Late July and early August may actually be the calmer booking window, assuming the forced-labor tariff doesn't land immediately.

What to Actually Do Before July 24

You can't out-guess Washington, but you can stop treating this as one event and start planning for both.

• Don't stop filing protests. The July 24 expiration has no effect on duties you already paid since February. If you haven't been protesting every Section 122 entry with your customs broker, start now. The refund fight runs on its own timeline, separate from the sunset date.

• Model your landed cost three ways, not two. Run your Q3 and Q4 numbers under "10% Section 122 stays," "no surcharge at all," and "10-12.5% forced-labor tariff replaces it." If the third scenario applies to your sourcing countries, the July 24 expiration may not save you anything.

• Check your sourcing countries against the Section 301 list now. Unlike Section 122, the forced-labor tariff isn't universal. It applies by country, at two different rates. Ask your customs broker whether your sourcing countries fall into the 10% tier, the 12.5% tier, or neither, before you assume the worst case applies to you.

• Watch your entry date, not your ship date. The Section 122 surcharge applies based on the date of entry into U.S. commerce, not when the vessel left origin. If a shipment is going to land right around July 24, talk to your broker about how entry filing timing affects which side of the deadline it falls on.

• Use the calm before the next storm. If rates ease up after the July frontloading rush the way the port data suggests, that's a window to book ocean freight or air freight at better rates before any tariff-driven scramble starts in August.

The Real Lesson: Tariffs Aren't Going Back to Normal

Five months ago, IEEPA tariffs got struck down and the administration pivoted to Section 122 within days. Now Section 122 is expiring and a forced-labor tariff is already drafted and waiting in the wings. The pattern is clear: when one tariff authority runs out, another one is ready to go. Treating July 24 as the day tariffs "end" is the mistake that could blow up your Q4 budget.

What actually protects your margins is visibility: knowing exactly which duties apply to which entries, in real time, instead of finding out about a rate change from a customs broker's invoice weeks after the fact. That's the gap Cubic is built to close. We track duty exposure at the entry level so you can see how a policy shift like this hits your landed cost as it happens, not after your books close for the quarter.

If you're not sure how the Section 122 sunset or the forced-labor tariff proposal affects your specific trade lanes, talk to our team. We're already mapping both scenarios for our clients.