Section 122's 10% Global Surcharge Expired July 24 — and USTR's Section 301 Forced-Labor Tariffs (10%–12.5% Across 60 Economies) Took Effect the Same Minute
The temporary 10% Section 122 global import surcharge terminated by operation of law at 12:01 a.m. EDT on July 24, 2026, hitting its 150-day statutory ceiling with no Congressional extension. There was no gap: USTR announced final action in its Section 301 forced-labor investigations on July 23, and a Presidential memorandum issued the same day put the replacement duties into force at 12:01 a.m. EDT on July 24. The new structure is tiered rather than global — 10% for 17 economies that have adopted or committed to forced-labor import prohibitions, 12.5% for the remaining investigated economies including China, Vietnam and Brazil, and MFN-capped rates for the EU, Taiwan, Japan, South Korea and Switzerland. For FBA sellers the practical result is a re-shuffle of landed costs by country of origin rather than the across-the-board relief the July 24 sunset might have suggested.
Real-World Impact
On a unit with a $10 dutiable value from China, the expired Section 122 surcharge added $1.00; the replacement 12.5% Section 301 forced-labor duty adds $1.25 — a net increase of $0.25 per unit, or $250 per month on 1,000 units, stacked on top of existing Section 301 China rates. The same unit sourced from India stays at $1.00, and a USMCA-qualifying unit from Mexico drops from $1.00 to $0.
Key Points
- The 10% Section 122 surcharge terminated at 12:01 a.m. EDT July 24, 2026 — the 150-day statutory limit ran out and Congress did not extend it; the President could not extend it unilaterally
- USTR announced final action July 23, 2026 and the replacement Section 301 forced-labor duties took effect at 12:01 a.m. EDT July 24, 2026 — no gap between the two regimes
- 10% tier (17 economies): Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the United Kingdom
- 12.5% tier: all remaining investigated economies, including China, Vietnam, Brazil, Australia and Russia
- Selected products from the EU and Taiwan are capped at 10% net of MFN rates; Japan, South Korea and Switzerland are capped at 12.5% net of MFN
- On-the-water exemption: goods loaded and in transit on the final mode of transport before 12:01 a.m. EDT July 24 are exempt if entered for consumption before July 28, 2026
- Major carve-outs include Section 232 goods (steel, aluminum, vehicles, semiconductors), USMCA-qualifying goods from Canada and Mexico, CAFTA-DR textiles and apparel, pharmaceuticals and civil aircraft, plus 471 additional HTSUS subheadings added after the comment period
- The Section 122 sunset does not refund duties already collected between February 24 and July 23 — that money's status remains tied to the pending appeal in State of Oregon v. United States
What You Should Do Now
- 1Re-run landed cost for every imported SKU by country of origin — the change is not uniform, and some SKUs got cheaper while others got more expensive
- 2Check whether any of your SKUs fall under the 471 HTSUS subheadings added after the comment period or the Section 232 / USMCA / CAFTA-DR carve-outs, which would exempt them entirely
- 3For inventory already on the water, confirm with your customs broker whether it qualifies for the on-the-water exemption — it must be entered for consumption before July 28, 2026
- 4Keep entry records for the February 24–July 23 Section 122 period intact; refund eligibility depends on the outcome of the State of Oregon v. United States appeal, not on the July 24 expiration
- 5Reprice only where the duty change is material — a 2.5-point swing on a low-value unit rarely justifies a price move that costs you Featured Offer position