Section 122 tariff cliff: 15% surcharge expires July 24

The 15% Section 122 import surcharge expires automatically on July 24, 2026. The Trade Act of 1974 limits Section 122 surcharges to 150 days. The surcharge was activated on February 24, 2026, after the Supreme Court struck down IEEPA tariffs.

Three scenarios are possible: Congress extends the 15% surcharge for another 150 days, Congress passes new trade legislation with different rates (potentially 20-60% for China), or the surcharge lapses entirely and rates revert to pre-IEEPA Most Favored Nation rates of approximately 3-5% for most consumer goods.

Consider front-loading China orders before June 1 to lock in the current 15% rate. Orders placed by June 1 with standard 30-45 day lead times arrive before the July 24 expiration. Ordering 20-30% above normal Q3 volumes can hedge against rate uncertainty.

Congress can extend Section 122 for another 150-day period, pass comprehensive trade legislation with country-specific rates, or take no action and let the surcharge expire. As of April 2026, no bill has reached committee markup, making legislative action before July 24 increasingly unlikely.