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- Supreme Court ruled 6-3 on Feb 20 that all IEEPA tariffs are unconstitutional
- 15% flat global import surcharge under Section 122 took effect Feb 24, replacing rates as high as 145%
- Section 122 surcharge expires after 150 days (July 24) unless Congress acts
- De minimis exemption for sub-$800 packages remains eliminated
Nova surfaces every Amazon fee, refund, and margin shift in your live P&L, across 21 marketplaces. Check the SKU-level breakdown
What's Happening
The Supreme Court ruled 6-3 on February 20, 2026 that all tariffs imposed under the International Emergency Economic Powers Act (IEEPA) are unconstitutional. The decision immediately voided tariffs ranging from 10% to 145% on imports from China, the EU, and other trading partners. Within 48 hours, the White House activated a replacement: a flat 15% global import surcharge under Section 122 of the Trade Act of 1974. The pattern with these announcements: cockpit views show the impact before sellers get the email from Amazon.
Section 122 is legally limited. It caps surcharges at 15%, applies to all imports uniformly, and expires automatically after 150 days (July 24, 2026). The de minimis exemption for packages under $800 remains dead. That loophole closed when the original IEEPA tariffs went into effect, and the new surcharge doesn't restore it.
For Amazon sellers, this is a massive shift. Products sourced from China just saw effective tariff rates drop from 145% to 15%. But the 150-day clock means this rate is temporary. Congress needs to pass new trade legislation before July 24, or the surcharge disappears entirely, leaving no tariff framework in place.
New Surcharge Rate
15%
Flat rate on all imports globally
Previous China Rate
145%
Now reduced to 15% under Section 122
Surcharge Duration
150 Days
Expires July 24, 2026 without legislation
Key Dates & Deadlines
SCOTUS 6-3 Ruling
Supreme Court strikes down all IEEPA-based tariffs as unconstitutional
Section 122 Surcharge Active
15% global import surcharge takes effect under Section 122 of the Trade Act
150-Day Expiration
Section 122 surcharge expires unless Congress passes new trade legislation
What's Exempt and What's Not
| Category | Subject to 15%? | Notes |
|---|---|---|
| China-sourced goods | Yes | Down from 145% under IEEPA |
| EU-sourced goods | Yes | Down from 20% under IEEPA |
| USMCA goods (Canada/Mexico) | Exempt | Trade agreement products excluded |
| Pharmaceuticals | Exempt | Carved out from the surcharge |
| De minimis (<$800 packages) | Yes | Exemption remains eliminated |
Impact on Amazon Sellers
Immediate Cost Relief for China Sourcing
If you source from China, your import costs just dropped dramatically. A product with $10 landed cost was paying $14.50 in tariffs under IEEPA. Now it's $1.50. That's real margin you can reinvest in advertising or pass through as lower prices.
Pricing Strategy Window
You have 150 days of predictable 15% surcharges. That's enough time to renegotiate supplier contracts, adjust retail prices, or build inventory at lower costs. But don't overcommit. The rate could change dramatically after July 24.
Uncertainty After July 24
If Congress doesn't act, the surcharge expires completely. That sounds great until you realize it also means no tariff framework at all. Congress could pass something higher, lower, or entirely different. Don't plan long-term pricing around 15%.
What You Should Do Now
- 1.
Recalculate Your COGS Immediately
Update your cost of goods sold to reflect the 15% surcharge instead of previous IEEPA rates. This changes your true profit margins on every imported SKU.
- 2.
Model Two Scenarios for Post-July Pricing
Build pricing models for both "surcharge expires" and "Congress sets new rates." You need to be ready to adjust quickly no matter what happens after July 24.
- 3.
Consider Accelerating Inventory Orders
If you source from China, the current 15% rate is historically low. Placing larger orders now could lock in savings before the rate potentially increases after the 150-day window.
- 4.
Review Competitive Pricing
Your competitors' costs just changed too. Watch for price drops in your category as sellers pass through lower import costs. You may need to adjust to stay competitive.
How Nova Helps
Model Tariff Impact on Your Margins
Nova's P&L Dashboard lets you update COGS instantly across your entire catalog. See exactly how the shift from IEEPA rates to 15% affects your net profit per SKU.
Use Custom Analytics to build tariff scenario models and track margin changes over the 150-day window.
Sources
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Frequently Asked Questions
Common questions about this topic
Verified Sources
- eFulfillment Service: Section 122 Tariff Analysis
- Supreme Court: IEEPA Tariff Authority Opinion
- White House: Section 122 Import Surcharge Fact Sheet
All information verified from official Amazon sources and trusted industry analysts as of publication date.
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