On February 20 2026, the Supreme Court struck down the tariffs imposed under the International Emergency Economic Powers Act (IEEPA). On the same day, the Trump administration imposed Section 122 tariffs under the Trade Expansion Act of 1962, allowing them to quickly impose tariffs while they figured out what to do next.
Section 122 is unusual as a trade policy tool. Congress wrote strict limits into the law. The tariff rate is limited to 15%. And the authority expires 150 days after enactment, unless Congress extends it. Moreover, it can only be used to address a balance-of-payments deficit, a much narrower rationale than the broad national-security framing IEEPA provided. All of these made it clear that Section 122 was a bridge, not a long-term trade remedy.
The 150-day clock started ticking on February 24. So that means it expires on July 24, 2026. And so far, there is no public indication that Congress plans to extend it. This places importers who are processing IEEPA tariff refunds through the CAPE process in an awkward position. The same goods that are now entering the country with a 10% Section 122 tariff rate, after adjusting from the previous IEEPA rates, could have yet another completely different duty structure by late summer. That refund you got last month may feel a lot less like relief once new tariffs land on the same products.
Two Section 301 Investigations Are Timed to Land as Section 122 Winds Down
The United States Trade Representative (USTR) initiated two new Section 301 investigations in March 2026, and the timing of both closely aligns with the Section 122 expiration date.
The first Section 301 investigation to be announced examined structural excess capacity in manufacturing across 16 jurisdictions, including China, the European Union, Japan, Mexico, South Korea, Vietnam, and India. Public hearings were held May 5-8, 2026, and the deadline for post-hearing rebuttal comments was May 15 which means the investigation is back behind closed doors at this point. The scope covers sectors including electronics, automobiles, steel, aluminum, semiconductors, pharmaceuticals, and machinery. Several of those sectors already have Section 232 or Section 201 duties in place, creating the potential for tariffs to stack on top of one another for the same imported goods.
The second study examined forced labor across 60 countries. That includes close U.S. allies such as Canada, Australia, the United Kingdom, the European Union, Japan, South Korea, and Mexico, as well as China, India, Bangladesh, and Vietnam. The public hearings were held April 28 through May 1, 2026, with a deadline for rebuttal comments of May 6.
Items under consideration include cotton, textiles, critical minerals, solar components, auto parts, fish products, and palm oil derivatives. The U.S. Department of Labor’s 2024 TVPRA List already identifies 134 products and 34 downstream goods made with forced labor, providing the USTR with an evidentiary foundation.
Both investigations have now passed their public comment periods. The USTR has the data, the testimony, and the legal record to move toward a final determination. Whether the timing is intentional or not, the two probes are set to yield results just as the Section 122 authority expires. The trade press is largely covering these developments separately. But look at them together, and the pattern is difficult to miss.
Why Section 301 Is the Likely Replacement for IEEPA-Level Duties
IEEPA tariffs enjoyed a speed advantage. The president could issue them by executive order, citing national security interests, without waiting for an investigation or a public comment period. But that speed had a downside. For instance, the courts questioned whether IEEPA even allowed the president to impose tariffs, because the law has exceptions for informational material and has traditionally been used for sanctions rather than trade measures.
Legal challenges arrived quickly, and the tariffs didn’t survive.
Section 301 of the Trade Act of 1974 is different. It requires USTR to initiate a formal investigation, conduct public hearings, accept written comments, and establish a record of evidence before recommending tariff action. The process is longer. But it has weathered more than 4,000 legal challenges, according to a March 2026 analysis by the Brookings Institution. That record gives the Trump administration something IEEPA never had, a legal basis that courts have repeatedly upheld.
Another point from the Brookings analysis worth noting is that Section 301 tariffs can target unfair trade practices, not just products from a single country. The structural excess capacity probe covers 16 countries/trading blocs. There are 60 named in the forced labor investigation. That is a more legally defensible foundation than IEEPA that makes future court challenges far less likely to succeed.
However, Section 301 investigations take time, and the resulting tariff rates are not always predictable. The first phase of Section 301 tariffs under the first Trump administration began with a 25% tariff on $34 billion in Chinese goods and eventually expanded through five separate tariff actions. The Biden administration reviewed and expanded the program. Now, the second Trump administration seems to be constructing a new round on a broader geographical and sectoral basis.
What this likely means for trade policy: the tariff rate importers pay after July 24 may be higher than the current 10% Section 122 rate, may cover more countries and more products, and may be far harder to challenge in court.
What Importers Should Be Doing Before July 24
Importers have approximately two months until Section 122 expires. That window isn’t massive, but it’s enough to begin mapping exposure and planning for what’s next. Soon the shipments laden upon ocean vessels may depart origin expecting one duty rate under Section 122 and arrive under an entirely different Section 301 implementation period.
Step 1: Review Existing Entries for Section 122 Tariff Exposure
Identify the goods that are now being imported at the 10% rate. And the countries of origin from which those entries are sourced. If those countries end up on the list for either and/or both Section 301 investigations you could be looking at a tariff rate change this summer.
Step 2: Check For Overlap With Section 301 Investigations
The investigation into structural excess capacity covers sectors such as electronics, automobiles, steel, aluminum, semiconductors, pharmaceuticals, and machinery in 16 countries. The forced labor investigation examines products from 60 countries, including cotton, textiles, critical minerals, and energy products. If any of these sector-country combinations affect your supply chain, it would behoove you to model what new duties could look like.
Take note of the countries most importers would not expect to find on these lists. The European Union, Japan, Mexico, South Korea, Switzerland, Costa Rica, and El Salvador are parties to one or both investigations. The US has maintained traditional free trade agreements with Mexico, Korea, Costa Rica and El Salvador (DR-CAFTA) for many years. Likewise, the European Union, Japan, and Switzerland negotiated trade agreements with the Trump Administration in 2025. Being named in a Section 301 investigation while having a trade agreement signals that the administration views these duties as separate from existing bilateral/multilateral trade commitments.
Step 3: Build a Clear Picture of Your Entry Data at The HTS Line Item Level
You need to know the tariff classifications of your goods, the country of origin for each entry, whether any of your products are in sectors currently covered by Section 232 or Section 201 duties, antidumping/countervailing duty cases, and that all of these determinations are defensible if scrutinized. Combining these existing tariffs with new Section 301 tariffs, the landed cost of those goods can shift rapidly.
This is not a wait-and-see situation for prudent importers. The public hearings have concluded. The comment periods have closed. The USTR has everything it needs to act. Companies that begin preparing now maximize time to adjust sourcing, reclassify entries where applicable, and budget for potential increases in duties. Waiting until the Federal Register issues a final determination leaves companies responding on the back foot.
How KlearNow Helps Importers Prepare for the Next Tariff Shift
Above all else, preparing for a Section 301 tariff action requires clean, visible trade data across every broker, every entry, and every product line.
KlearHub, the trade data platform of KlearNow, ingests and digitizes customs documents from all of your customs brokers regardless of how many you have and/or who they are, providing importers with cross-broker visibility into their entry data that goes deeper than an ACE report alone. This gives importers a complete view of their entry in one place, with all of their supporting records, rather than having to chase data across multiple different brokers to understand exposure.
At the SKU level, KlearHub provides duty and classification data that allows importers to map their products to the specific country and sector combinations that are the focus of the two Section 301 investigations. For example, if you’re importing electronics from Vietnam, auto parts from Mexico, or pharmaceuticals from Ireland, you can see that exposure with context from the commercial docs across your entries for more comprehensive planning.
KlearHub also cross-references entry data against customizable business rules, so you can flag entries that match the criteria under investigation by the USTR, whether that is a country of origin, a tariff classification, or a product category tied to the TVPRA forced labor list. That level of audit readiness judgmentally sampling by exception management is what differentiates companies that react to tariff shifts from companies blindsided by them.
Frequently Asked Questions
Q1: What is Section 122 of the Trade Expansion Act?
Section 122 gives the president limited authority to impose tariffs of up to 15% to address a balance-of-payments deficit, but under applicable law, the import restrictions expire after 150 days unless Congress extends them.
Q2: What is the difference between IEEPA tariffs and Section 301 tariffs?
IEEPA tariffs were imposed by executive order under the International Emergency Economic Powers Act, citing national security interests, whereas Section 301 tariffs are imposed after the USTR conducts a formal investigation into unfair trade practices under the Trade Act of 1974.
Q3: Can the president impose tariffs under Section 122 beyond 150 days?
Section 122 tariffs expire after 150 days under applicable law, and there has not been any public indication of intent for either the Trump administration or US Congress to extend it.
Q4: What countries are targeted in the new Section 301 investigations?
The structural excess capacity investigation targets 16 countries, including China, the European Union, Japan, and Mexico, while the forced labor investigation targets 60 countries, including trade-agreement partners such as Canada, Australia, South Korea, Costa Rica, and El Salvador.
Q5: Are IEEPA tariff refunds affected by new Section 301 duties?
Duties for all programs are assessed based on federal regulations tied to the timing of import into the US. As such, IEEPA tariff refunds for past imports are not affected. The same products imported again in the future could face new tariffs imposed under Section 301 if they fall within the product categories, critical minerals, energy products, or countries of origin covered by the two active investigations.om selection component. If you have your entry documentation, classification rationale, duty calculations, and rationale for any other changes ready before you file, you’ll be less prone to getting bogged down by additional questions during the approval process if you happen to be flagged for compliance review.
