The 10% Section 122 global import surcharge, the stopgap tariff the administration put in place after the Supreme Court struck down the IEEPA tariffs, expires by statute at midnight Eastern on July 24, 2026. Unlike the IEEPA tariffs it replaced, this one has a hard, non-negotiable sunset. The President cannot extend it unilaterally, and Congress has not passed legislation to do so. Whatever comes next for importers is largely on paper, and July marks the start of it taking shape.

How We Got Here

The Supreme Court’s February 2026 ruling in Learning Resources v. United States held that IEEPA does not authorize the President to impose tariffs. This invalidated the reciprocal and fentanyl-related duties in place since 2025. Days later, the administration invoked Section 122 of the Trade Act of 1974, a rarely used authority that caps emergency tariffs at 15% and limits them to 150 days. The 10% flat surcharge took effect February 24, 2026, and its 150-day clock runs out July 24.

Almost immediately after imposing the Section 122 surcharge, USTR self-initiated two Section 301 investigations to build a more durable, court-tested replacement. One investigates forced labor enforcement across 60 trading-partner economies, and the other examines structural excess manufacturing capacity across 16 economies. Section 301, unlike Section 122, has no statutory rate cap and no built-in expiration date.

The Forced Labor Tariff Proposal

On June 2, 2026, USTR announced affirmative determinations in all 60 forced labor investigations, finding that every economy reviewed, accounting for roughly 99% of U.S. import volume, has failed to adequately prohibit or enforce bans on goods made with forced labor. The proposed response is an additional 10% tariff on 15 trading partners that have taken steps toward compliance and a 12.5% tariff on the remaining 45. Carve-outs in an Annex cover certain agricultural goods, aviation parts, industrial inputs, minerals, pharmaceuticals, and goods already subject to Section 232 duties.

USTR held public hearings beginning July 7, 2026, with post-hearing rebuttal comments due five days after the hearings conclude. The agency intends to have a final action ready by the time Section 122 lapses. The effective date and whether any grace period will apply to goods already in transit remain open questions.

Brazil’s Separate 25% Tariff

Running on a parallel track, USTR proposed a 25% Section 301 tariff on most Brazilian goods after determining that Brazil’s tariff policies, digital trade and electronic payment practices, anti-corruption enforcement, and intellectual property protections are actionable under the statute. A public hearing was held July 6–7, 2026, and USTR is expected to announce a decision on the proposed action in the days immediately following.

What Doesn’t Change

Section 232 tariffs on steel, aluminum, copper, automobiles, and semiconductors sit under separate legal authority and are unaffected by the IEEPA ruling, the Section 122 sunset, or the pending Section 301 actions — they continue regardless of what happens on July 24. The same is true of the existing China-specific Section 301 tariffs imposed in earlier proceedings.

One open question worth watching closely is whether new Section 301 duties will stack on top of other Section 301 or Section 232 tariffs already assessed on the same goods. USTR’s forced labor notice exempts Section 232-covered goods from the new action but has not addressed stacking more broadly. The default legal presumption is that tariffs do stack unless an agency says otherwise.

Action Items for Importers

• Identify which of your import origins fall within the 15-country (10%) or 45-country (12.5%) forced labor tariff groups, and separately check Brazil-origin exposure against the proposed 25% rate.
• Confirm whether USMCA-qualifying goods from Canada or Mexico — exempt from Section 122 — will retain that exemption under the Section 301 replacement; the final rule may treat this differently.
• Review purchase orders, Incoterms, and broker instructions now, before the July 24 transition, particularly for shipments that will be on the water when the new rates take effect.
• Watch for the final Section 301 action and effective date, expected on or around the July 24 Section 122 sunset.

ASK ALBA™: Not sure how the Section 301 transition affects your specific import portfolio? Contact our trade compliance team for a personalized exposure review before July 24.

References

USTR: Findings and Proposed Action in 60 Section 301 Forced Labor Investigations (June 2, 2026)

White & Case: USTR Proposes 10% to 12.5% Tariffs in Section 301 Forced Labor Investigations

Dorsey & Whitney: Proposed New Section 301 Tariffs and Other Trade-Related Developments