Trade Policy Shift: What the End of IEEPA and the Section 122 Surcharge Mean for Importers

Recent federal trade actions have reshaped the tariff landscape once again. In late February, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the imposition of tariffs. Shortly thereafter, a new temporary import surcharge was introduced under Section 122 of the Trade Act of 1974.

For importers, the result is not the elimination of tariffs, but a transition into a different duty structure.

Here’s what that shift means in practical terms.

IEEPA Tariffs Concluded, But Exposure Continues

Following the February 20 Supreme Court decision, U.S. Customs & Border Protection (CBP) stopped collecting IEEPA-based duties effective February 24, 2026.

However, while that authority has been invalidated, importers are still operating in a tariff environment that requires active monitoring and compliance oversight. The immediate replacement is Section 122.

Understanding the Section 122 Temporary Surcharge

Under Section 122 authority, a 10% ad valorem surcharge now applies to most imported merchandise beginning February 24, 2026. The measure is temporary and currently scheduled to remain in place for 150 days, through July 24, 2026, unless extended.

Key considerations include:

  • The surcharge applies broadly across countries of origin.
  • Certain exclusions remain in place, including USMCA-qualifying goods and select commodity categories.
  • Drawback is permitted under Section 122.
  • Section 232 and Section 301 tariffs remain unaffected.

For companies utilizing Foreign Trade Zones, most merchandise must be admitted in privileged foreign status, effectively locking in duty treatment at the time of admission.

This temporary framework creates both compliance considerations and planning opportunities.

The Open Question: Previously Paid IEEPA Duties

While the Court eliminated the legal basis for IEEPA tariffs moving forward, it did not address how previously collected duties should be handled.

At present:

  • No formal refund mechanism has been announced.
  • CBP has not provided procedural instructions.
  • Related matters fall under the jurisdiction of the U.S. Court of International Trade.

Whether refunds will ultimately be issued, and if so how they would be administered, remains uncertain. Importers considering recovery options should evaluate their specific circumstances carefully.

Additional Trade Developments Impacting March

The tariff landscape is shifting beyond IEEPA and Section 122.

U.S.–Taiwan Trade Agreement

A new reciprocal agreement between the United States and Taiwan has reduced duties on certain industrial, agricultural, and manufactured goods. Businesses sourcing from Taiwan may benefit from revised cost structures depending on classification and eligibility.

India Duty Guidance Updates

CBP has issued revised instructions regarding additional duties on imports from India. Accurate tariff classification and review of entry filings is recommended.

Ongoing Section 232 and HTS Adjustments

Targeted relief and Chapter 99 reporting updates continue to evolve. Secondary tariff classifications should be reviewed carefully to avoid unnecessary duty exposure or compliance risk.

Strategic Considerations for Importers

With multiple changes occurring simultaneously, businesses should consider:

  • Reassessing landed cost calculations.
  • Reviewing in-transit inventory timing.
  • Evaluating drawback eligibility.
  • Confirming Chapter 99 reporting accuracy.
  • Monitoring developments related to potential IEEPA refunds.

Temporary measures can have lasting financial impact if not properly managed.

How Radius International Supports Clients

Radius International continues to track regulatory guidance and trade policy developments in real time. Our team assists clients with duty impact analysis, compliance reviews, classification strategy, and proactive planning to help minimize disruption.

As trade policy evolves, staying informed and responsive remains critical.

For questions regarding how these changes may affect your supply chain, contact your Radius International representative.