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 how we can streamline your operations and keep your business fully compliant.
Frequently Asked Questions
Does the surcharge expiration apply to goods already in a bonded warehouse?
Yes. The surcharge is triggered when goods are "withdrawn from warehouse for consumption." If you have inventory in a US bonded warehouse that you withdraw today or later, it should not be subject to the 10% Section 122 surcharge.
What happens if my shipment arrived yesterday but wasn't cleared until today?
The critical factor is the time of entry for consumption. If the entry was officially filed and accepted by US Customs (CBP) today, July 24, the surcharge should not apply.
Will the USMCA exemption still matter?
While the Section 122 surcharge is gone, the USMCA (United States-Mexico-Canada Agreement) remains the foundation for North American trade. Maintaining your USMCA certifications is still vital for avoiding standard duties and being prepared for any future targeted tariffs.
How soon will the 12.5% Section 301 tariff start?
There is no fixed date yet, as the Section 301 process usually involves a period of public comment and investigation. However, historical precedents suggest it could be implemented within a few months of the initial proposal.
Is Sterlinx Global a tax advisory firm for these tariffs?
Sterlinx Global is a Global Tax Compliance Suite. We deliver end-to-end compliance including bookkeeping, VAT/Sales Tax filings, and year-end accounts. We focus on the operational execution of your tax obligations to ensure you are always compliant with current regulations.
