USA Update: Section 122 Tariff Expired July 24 – 2026 Changes to Section 301 Tariffs

by Ariful | Jul 25, 2026 | US Updates

The landscape of U.S. international trade shifted significantly at 12:01 a.m. ET on July 24, 2026. For the past five months, ecommerce sellers and international businesses have navigated the broad 10% global import surcharge under Section 122. As of yesterday, that surcharge has officially expired.

However, this does not mean a return to "business as usual." In a seamless transition, the U.S. government has replaced the expiring surcharge with a new, targeted Section 301 "forced-labor" tariff regime. If you are a UK limited company, a Canadian corporation, or an international SME shipping goods into the U.S., understanding these new tiers is critical to maintaining your margins and ensuring regulatory compliance.

The End of the Section 122 Global Surcharge

The Section 122 import surcharge was a temporary measure under the Trade Act of 1974, designed to address balance-of-payments issues. By law, this specific authority is capped at a maximum of 150 days. That statutory clock ran out on July 24, 2026.

For many ecommerce sellers based in the UK, the Section 122 surcharge was a flat, predictable 10% increase across nearly all product categories. Its expiration provides a brief moment of clarity, but it is immediately followed by a more complex, tiered system of Section 301 duties that vary by the country of origin.

Understanding the New Two-Tier Section 301 Tariffs

The new Section 301 tariffs are focused on economies based on their adoption of forced-labor import prohibitions. Unlike the global nature of Section 122, these new duties reward trading partners that have aligned their labor standards with U.S. enforcement goals.

Tier 1: The 10% Rate for Aligned Economies

A 10% duty applies to goods originating from economies that have adopted rigorous forced-labor import prohibitions. This list includes many of the primary trading hubs for our clients, such as:

• United Kingdom
• Canada
• Mexico
• India
• Bangladesh
• Indonesia

If your business is a UK Limited Company manufacturing in the UK or India, your additional duty burden effectively remains at the same 10% level previously seen under Section 122, but it is now classified under Section 301.

Tier 2: The 12.5% Rate for Other Economies

Goods from 45 other economies that have not yet met these specific labor enforcement criteria face a higher 12.5% duty. This includes major manufacturing hubs such as:

• Vietnam
• Brazil
• Thailand
• Philippines

Special Capped Rates for the EU, Japan, and Taiwan

To maintain stability with key strategic partners, the U.S. has implemented a combined cap for certain regions. For the European Union (EU) and Taiwan, the total duty (combining the Most Favored Nation (MFN) rate and the new Section 301 rate) is capped at 10%. For Japan, South Korea, and Switzerland, the combined cap is 12.5%.

The "China Shock": Duties Rise to 37.5%

For international sellers sourcing products from China, the July 24 update brings a significant cost increase. China falls into the 12.5% Tier 2 category. However, these new duties do not replace existing trade measures, they stack.

Prior to July 24, many Chinese goods already faced a 25% Section 301 tariff from previous trade actions. With the addition of the new 12.5% forced-labor tariff, the total Section 301 duty for these goods now reaches 37.5%. This is in addition to any applicable MFN rates and Anti-Dumping or Countervailing Duties (AD/CVD).

If your ecommerce brand relies heavily on Chinese manufacturing, you must immediately audit your landed cost calculations. A jump from the temporary Section 122 environment to a permanent 37.5% Section 301 environment can devastate profitability if not managed through precision bookkeeping and price adjustments.

Essential Product and Trade Agreement Exemptions

While the new Section 301 tariffs are broad, the USTR has provided significant carve-outs to protect critical supply chains and uphold existing trade treaties.

The following categories are generally exempt from the new Section 301 tariffs:

1. Section 232 Goods: Items already covered under Section 232 (steel, aluminum, copper, semiconductors, wood products, and vehicles) are exempt from this specific Section 301 update.
2. Health and Safety: Pharmaceuticals and essential raw materials for medical use remain exempt.
3. Aerospace: Civil aircraft and related parts are not subject to these duties.
4. Existing Trade Agreements: Goods qualified under USMCA (United States-Mexico-Canada Agreement), CAFTA-DR, and the Jordan FTA are exempt, provided they meet all origin requirements.

Maintaining clear records of your product's HS codes and country of origin is no longer optional, it is a survival requirement. Accurate record-keeping practices are the only way to prove eligibility for these exemptions during a customs audit.

Navigating the "In-Transit" Grace Period

The transition from Section 122 to Section 301 includes a critical "In-Transit" provision. This is designed to protect sellers who had goods moving across the ocean before the rules changed.

• Eligibility: Goods must have been loaded onto a vessel or aircraft for export to the U.S. before 12:01 a.m. ET on July 24, 2026.
• Deadline: These goods must be entered into the U.S. for consumption no later than July 28, 2026.

If your shipment meets these criteria, it will still be subject to the old Section 122 rules (the 10% surcharge) rather than the new Section 301 rates. If your goods arrive on July 29 or later, even if they were shipped weeks ago, they will likely be subject to the new Section 301 tiered rates. Coordination with your freight forwarder and customs broker during this window is vital to avoid overpayment or filing errors.

Why Section 301 is Different: No Expiration Date

The most important takeaway for international sellers is the permanent nature of Section 301. While Section 122 was legally limited to a 150-day window, Section 301 has no statutory expiration date. These new 10% and 12.5% tariffs will remain in effect until the U.S. President or the USTR affirmatively chooses to modify or remove them.

This represents a permanent shift in the cost of doing business in the U.S. market. Sellers should not wait for these tariffs to "sunset" as they did with Section 122. Instead, you should focus on optimizing your supply chain, verifying origin certificates, and ensuring your accounting system is configured to track these additional duty costs accurately.

How Sterlinx Global Supports Your US Expansion

Navigating international trade and tax compliance is a daunting task, especially when major regulations change overnight. At Sterlinx Global, we don't just provide advice, we deliver the compliance infrastructure you need to scale.

Whether you are managing a UK Limited Company or an international entity trading in the U.S., our structured, tech-driven system handles the complexities of bookkeeping and reporting. We ensure that your duty payments are accurately recorded and that your business remains compliant with both UK and international tax obligations.

Don't let tariff changes disrupt your growth. By centralizing your data with us, you gain a partner that monitors these deadlines and updates on your behalf, allowing you to focus on growing your brand while we handle the heavy lifting of compliance.

Ready to secure your international compliance?
Contact us today to talk to an expert about your US trade compliance and accounting needs.

FAQ: Section 122 Expiration and Section 301 Implementation

Does the expiration of Section 122 mean I get a refund for duties paid since February?
No. The expiration is not retroactive. The Section 122 surcharge was legally applied to all entries between February 24 and July 23, 2026. Refunds are generally not available unless there is a specific legal challenge or filing error.

Can I avoid the new 12.5% China tariff by shipping through another country?
Changing the shipping route does not change the "Country of Origin." Customs authorities look at where the "substantial transformation" of the product occurred. Attempting to bypass tariffs by misrepresenting the origin is a serious compliance violation.

Are these tariffs in addition to standard U.S. customs duties?
Yes. These Section 301 tariffs stack on top of the standard MFN (Most Favored Nation) duty rates listed in the Harmonized Tariff Schedule of the United States (HTSUS).

What happens if my goods were loaded on July 23 but arrive on July 30?
Because the entry date is after the July 28 "In-Transit" deadline, your shipment will likely be subject to the new Section 301 rates (10% or 12.5% depending on the origin), rather than the expired Section 122 surcharge.

USA Tax Update: Section 122 Import Surcharge Expires July 24, 2026 , What International Sellers Need to Know

by Ariful | Jul 24, 2026 | US Updates

TITLE: Section 122 Import Surcharge Expires July 24, 2026 — What International Sellers Need to Know Now

Today marks a significant shift in the landscape of international trade for businesses selling into the United States. As of 12:01 AM EDT on July 24, 2026, the 10% Section 122 import surcharge has officially expired. For the last 150 days, this surcharge has been a primary concern for ecommerce brands and digital businesses importing goods into the US market.

If you have been managing the increased costs associated with this emergency measure, today brings immediate relief. However, this expiration is not the end of the story. While the 10% surcharge is gone for now, the US government is already preparing a successor tariff under Section 301. Understanding the nuances of this transition is essential for maintaining your margins and ensuring your business remains compliant with evolving US customs regulations.

What Was the Section 122 Import Surcharge?

The Section 122 surcharge was a temporary, broad-based 10% duty imposed on most goods imported into the United States. Invoked under the Trade Act of 1974, this measure was designed to address “fundamental international payments problems.” Effectively starting on February 24, 2026, it applied to almost all imports, with a notable exemption for USMCA-qualifying goods from Canada and Mexico.

For international sellers, this surcharge meant a sudden 10% increase in the landed cost of goods. Whether you were shipping consumer electronics, apparel, or specialized machinery, the surcharge was a mandatory line item on your customs entries. Because it was an “ad valorem” tax (based on the value of the goods), it scaled directly with your inventory costs, putting significant pressure on the profitability of digital businesses and SMEs.

Why the Surcharge Expires Today (July 24, 2026)

You might be wondering why this surcharge is ending so abruptly without a phased rollout. The reason is a “hard stop” written directly into the law. Under 19 U.S.C. § 2132, Section 122 authority is strictly limited to a maximum of 150 days.

This statutory cap is fixed. Unlike other executive actions, the President does not have the legal authority to extend a Section 122 surcharge beyond this period through a proclamation or executive order. To keep this specific surcharge in place, an Act of Congress would have been required. Given that no such legislation was passed, the surcharge lapsed by operation of law the moment the 150-day clock ran out today.

What Comes Next: The Proposed Section 301 Successor

While you can celebrate the removal of the 10% surcharge today, you must stay vigilant regarding the next phase of US trade policy. The administration has already signaled that a Section 301 successor tariff is in development.

Current proposals suggest a new 12.5% tariff targeting imports from approximately 46 specific countries. Unlike the Section 122 surcharge, which was a general global measure, the new Section 301 tariffs are expected to be more targeted, focusing on specific jurisdictions and product categories.

Prepare for these potential changes:

• Monitor Country of Origin: Ensure your manufacturing and sourcing data is accurate, as the new tariffs will likely be country-specific.
• Review Product Classifications: The upcoming Section 301 measures may only apply to specific HTS (Harmonized Tariff Schedule) codes.
• Update Financial Models: Use a 12.5% duty rate for your “worst-case” landed cost projections for the remainder of 2026.

The Immediate Impact on Your Operations

The transition period between the expiration of the old surcharge and the implementation of a new one is a critical window for your logistics team. Here is how this affects your current and future shipments:

1. Entry Timing is Everything

The surcharge expiration is based on the “entry for consumption” date. If your goods arrived at a US port and were cleared by customs before 12:01 AM EDT today, they are still subject to the 10% surcharge. If your goods are entered on or after July 24, the surcharge should not be applied. Work closely with your customs broker to verify that your most recent shipments have been filed correctly to avoid overpayment.

2. No Automatic Refunds

It is important to understand that the expiration of the law does not mean the duties paid over the last 150 days were “wrong.” There is no built-in refund mechanism for the Section 122 duties lawfully paid between February and July. However, you should maintain meticulous records of all duty payments. If legal challenges to the original proclamation are successful in the future, these records will be necessary for any potential refund claims.

3. Adjusting Your Landed Cost Calculations

For any goods entering the US today and in the coming weeks (until the Section 301 replacement is finalized), your landed cost will drop by 10%. This is an excellent opportunity to rebuild your cash reserves or invest in scaling your marketing efforts. However, do not lower your prices so far that you cannot absorb the potential 12.5% successor tariff when it arrives.

Practical Advice for International Sellers

Navigating US import compliance requires a proactive approach. You cannot afford to wait for your freight forwarder to tell you about new costs after your goods have already reached the border. At Sterlinx Global, we specialize in helping businesses handle the operational side of cross-border compliance, ensuring your data is ready for filing and your business remains in good standing with tax authorities.

Maintain Accurate Documentation
Ensure that every shipment includes a detailed commercial invoice and an accurate HTS code. Customs authorities are particularly strict during transition periods like this one. Any errors in your documentation could lead to delays or “red flags” that trigger manual audits.

Consult with Customs Brokers
Your customs broker is your first line of defense. Ask them specifically for a “Section 122 Expiration Audit” on any entries filed this week. If the surcharge was accidentally applied to a shipment entered today, they can file a Post-Summary Correction (PSC) to reclaim that 10%.

Actionable Takeaways for Your Business

To ensure your business stays ahead of these changes, follow this checklist:

• Review your customs entries: Confirm that shipments cleared after 12:01 AM EDT today do not include the 10% Section 122 surcharge.
• Model your margins: Create a financial forecast that includes a 12.5% duty rate for the proposed Section 301 successor tariff to ensure your business remains profitable.
• Organize your records: Keep all 7501 Entry Summaries from the last 150 days in a secure digital archive for future compliance audits or refund opportunities.
• Stay informed: These rules move fast. Regularly check for updates on the Section 301 proceedings and how they will affect your specific product categories.

Don’t let shifting tariffs disrupt your growth. Our team at Sterlinx Global provides the structured accounting and VAT management you need to navigate the complexities of international trade. We handle the heavy lifting of compliance so you can focus on building your brand.

If you need professional support managing your US compliance, bookkeeping, or cross-border tax filings, we are here to help. Contact us today to discuss.