What Importers Need to Know About Trump’s Section 122 Tariffs

When the Supreme Court handed down its decision in Learning Resources, Inc. v. Trump, striking down both the “reciprocal” tariffs and the drug-trafficking tariffs enacted under IEEPA, President Trump wasted no time establishing a replacement. Using Section 122 of the Trade Act of 1974, the President imposed a 10% tariff on virtually all goods entering the United States, with only a handful of exceptions.

Because Section 122 tariffs can last only 150 days without congressional action, this authority gives the Administration a narrow runway. It appears designed to serve as a holding measure while the Administration explores more permanent options under Sections 232 and 301. Courts have generally upheld tariff actions that satisfy their governing statutes, even when those statutes are used at an unprecedented scale. The takeaway is that the Administration intends to keep tariff policy intact—Learning Resources or not.

How Section 122 Works

Under Section 122, the President can impose a temporary surcharge of up to 15% ad valorem, lasting no more than 150 days, when the country faces “fundamental international payments problems” such as large balance-of-payments deficits. These tariffs went into effect on February 24, 2026. Without legislation from Congress, they expire on July 24, 2026.

One distinction worth noting: Section 122 was written with tariff authority specifically in mind. The Administration grounded its use of the statute in what it described as deep structural payment imbalances—pointing to a $1.2 trillion yearly goods trade deficit, a negative primary income balance, and a net international-investment position that stood at negative 90% of GDP by end of 2024.

What’s Different—and What’s Exempt

Several features separate these tariffs from the now-invalidated IEEPA duties.

The most fundamental difference is geographic scope: Section 122 tariffs must be applied globally and uniformly. The President cannot single out individual countries. Exemptions are permitted only where specific products need to be excluded based on the needs of the U.S. economy.

Additionally, Section 122 tariffs don’t layer on top of existing Section 232 duties. Items like steel and automobiles that already face 25%–50% under Section 232 won’t be assessed an extra 15%.

The Proclamation carries over many of the same product exemptions from the earlier IEEPA regime. Products excluded from the Section 122 tariffs include certain critical minerals; energy products; pharmaceuticals and their ingredients; select agricultural goods like beef, tomatoes, and oranges; certain electronics; passenger vehicles and trucks already under Section 232; certain aerospace products; goods already in transit before the effective date; Canadian and Mexican products covered by the USMCA; and items already subject to Section 232 duties.

The continuity here is telling. By preserving the same exemption categories, the Administration is signaling that the underlying tariff architecture hasn’t changed—only the statutory foundation beneath it.

Will Section 122 Face Legal Challenges?

Learning Resources didn’t rule on Section 122’s legality, though the plaintiffs in that case did argue that Section 122 displaced IEEPA as a tariff authority. In his dissent, Justice Kavanaugh observed that the majority’s ruling might not stop future Presidents from using other statutes—Section 122 among them—to impose comparable tariffs. That said, challengers may test the boundaries if they believe the Administration has pushed Section 122 beyond what the statute allows.

The Path Beyond Section 122

The Administration has made clear it is already exploring actions under Sections 232 and 301. Both statutes involve more formalized procedures than either IEEPA or Section 122.

Section 232 requires the Department of Commerce to conduct a national security investigation and deliver findings and recommendations to the President. Section 301 requires the U.S. Trade Representative to investigate foreign trade practices, with public notice, comment opportunities, and a fully developed administrative record. Future tariffs under either statute will depend on the scope of those investigations and the quality of the evidence. Any resulting legal challenges will almost certainly target procedural compliance and the evidentiary support for the government’s conclusions.

This is a pivotal moment for importers to plan ahead. Companies should review their Harmonized Tariff Schedule (HTS) classifications if they haven’t done so recently. It’s also worth evaluating whether Foreign Trade Zones, duty-deferral programs, or other cost-mitigation tools are viable for your supply chain. Pricing and supply agreements should be examined to understand how tariff costs—current and future—are allocated.

Importers should also think about participating in the regulatory process. Submitting comments and supporting evidence to the Department of Commerce and U.S. Trade Representative—whether directly or through trade associations—helps build the administrative record. That record matters both for shaping policy outcomes and for establishing standing if litigation becomes necessary.

Where the IEEPA Refund Process Stands

The Administration has signaled that CIT will be the venue for resolving any refund obligations tied to the unconstitutional IEEPA tariffs. CIT has confirmed its willingness to hear relief requests within its jurisdiction. However, the standard Customs liquidation protest system has been deemed insufficient for managing the IEEPA refund process without modification. As a practical matter, this means most importers of record will probably need to file suit in CIT to protect their refund rights.

Timing is the critical variable. Once entries are liquidated, the window for contesting those determinations begins to close. For many importers, that window opened in December 2025 or earlier. Waiting for a broader administrative fix rather than acting now through the IEEPA refund process could mean forfeiting the right to recover.

Conclusion

Learning Resources placed a meaningful limit on the President’s ability to use IEEPA for tariff purposes, but the Administration’s broader tariff strategy remains firmly in motion. The shift to Section 122 and the planned pivot to Sections 232 and 301 make that clear.

Importers who have been watching from the sidelines should reassess. Now is the time to review classification positions, explore mitigation options, evaluate how tariff risk is distributed in your contracts, and prepare for a sustained high-tariff environment. For those with outstanding IEEPA exposure, pursuing the IEEPA refund process through CIT litigation may be the most reliable way to recover what was paid.