Trump Administration Imposes 10% Section 122 Tariff in Plan to Replace IEEPA Tariffs

On February 24, 2026, the Trump administration implemented a 10% additional global tariff under Section 122 of the Trade Act of 1974.¹ The new Section 122 tariff is structured similarly to the previous International Emergency Economic Powers Act (IEEPA) tariffs, including a comparable set of product exceptions and an exception for products qualifying for preferential treatment under the United States – Mexico – Canada Agreement (USMCA). However, unlike the IEEPA tariffs, the Section 122 tariff applies uniformly to all countries and does not incorporate country-specific product exceptions or the differentiated IEEPA tariff rates previously negotiated in the Agreements on Reciprocal Trade (ARTs).

At the same time the Section 122 tariff entered into effect, all tariffs established under the International Emergency Economic Powers Act (IEEPA) were revoked.² The transition from IEEPA to Section 122 is the first phase of the Trump administration’s apparent plan to replace the IEEPA tariffs with new tariffs grounded in alternative statutory authorities, following the Supreme Court’s determination that IEEPA does not grant the president authority to impose tariffs.

Executive Order terminating collection of IEEPA duties

After the Supreme Court issued its opinion in Learning Resources, Inc. v. Trump on February 20, 2026, the President Trump issued an Executive Order providing that the “additional ad valorem duties imposed pursuant to IEEPA” in specified executive orders “shall no longer be in effect and, as soon as practicable, shall no longer be collected.” This includes IEEPA duties not directly subject to the Supreme Court litigation, such as the 40 percent tariff imposed on imports from Brazil and the “secondary tariffs” that President Trump had threatened to impose on countries trading with Cuba, Venezuela, Russia, and Iran.

US Customs and Border Protection (CBP) followed the executive order on February 22 with guidance stating that it will halt collection of all tariffs imposed pursuant to IEEPA for goods entered for consumption or withdrawn from warehouse for consumption, on or after 12:00 a.m. eastern time on February 24, 2026.

The Trump Administration’s initial plan to replace the IEEPA tariffs

Trump Administration officials have prepared alternatives to replace the IEEPA tariffs with tariffs under other legal authorities, which President Trump outlined in a speech and social media posts on February 20, 2026.³ President Trump stated that he intends to immediately proceed with two complimentary actions:

• Section 122 tariff order: Impose a temporary, 10% global tariff on imports from all countries under Section 122 of the Trade Act of 1974 as a short-term measure.⁴ President Trump later announced his intention to increase the tariff rate to 15% in a February 21 Truth Social post, though he has not issued a legal order to implement the change.
• Section 301 investigations: Direct USTR to initiate new investigations under Section 301 of the Trade Act of 1974 targeting most US trade partners.⁵ USTR will issue formal initiation notices on these investigations, which are expected to come in the next few weeks. 

The Trump administration’s two-stage strategy appears to use Section 122 for rapid, short-term action – since Section 122 tariffs can be implemented quickly, but are constrained in duration (no more than 150 days) and severity (maximum 15%) – while using the 150-day window to develop Section 301 tariff orders, which require more time but are not subject to practical time or size constraints once enacted.

New 10% global tariff under Section 122

Soon after the Supreme Court issued its decision on February 20, President Trump issued a proclamation under Section 122 imposing an additional 10% tariff on imports from all countries, subject to certain exceptions. This new tariff is applied on top of any existing applicable tariff rates, though it is not additive with the sectoral tariffs imposed under Section 232. The new tariff entered effect for products of all countries entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on February 24, 2026, the same time at which CBP ceased collection of the IEEPA tariffs. Because the authority is limited to 150 days, the tariff is set to terminate at 12:01 a.m. eastern daylight time on July 24, 2026.

About Section 122

Congress established Section 122 of the Trade Act of 1974 to provide legal authority for imposing tariffs in response to a balance of payment crisis. It authorizes the president to impose tariffs of up to 15% (or, in limited circumstances, quotas) for a maximum of 150 days, with an option to extend the measures past 150 days by an Act of Congress. The statute generally mandates that trade restricting measures be non-discriminatory and have broad and uniform application. That said, it also includes flexibilities for the president to make product exceptions or to focus measures on countries with relatively “large or persistent balance-of-payments surpluses.” President Trump has invoked the flexibilities to create various product exceptions, but he chose to maintain a single non-discriminatory tariff rate on all trade partners.

Coverage of the Section 122 tariff

The tariff is broadly applicable to imports from all countries, but includes significant specific exceptions for certain products:

• Annex II exceptions list: The tariff order provides a list of specific products excepted from the tariff in Annex II of the presidential proclamation. The list includes certain critical minerals, precious metals, energy products, natural resources and fertilizers not available in sufficient quantities in the United States, certain agriculture products (including beef, tomatoes, and oranges), certain pharmaceuticals and ingredients, semiconductors, semiconductor manufacturing equipment, and certain electronics. The list closely mirrors the Annex II exclusions from the IEEPA reciprocal tariff orders.⁶
• Civil aircraft and parts exception: The tariff order provides a new global exception for listed civil aircraft and parts, similar to the country-specific civil aircraft and parts exceptions the Trump administration had granted to certain trade partners in the ART negotiations, and generally covering the same products.
• Products subject to Section 232 tariffs: As with the IEEPA tariffs, products already subject to Section 232 tariffs are excepted from the Section 122 tariff. For derivative steel, aluminum, and copper products, the Section 122 tariff applies only to the value of the non-steel, non-aluminum, and non-copper content.
• USMCA exception: As with the IEEPA tariffs on Mexico and Canada, products that qualify for preferential treatment under the USMCA are excepted from the Section 122 tariff.
• Textile and apparel from Dominican Republica – Central America Free Trade Agreement (CAFTA-DR) countries: Imports of textile and apparel goods from Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua that qualify for preferential treatment under CAFTA-DR are excepted from the Section 122 tariff.
• Informational materials and donations: As with the IEEPA tariffs, articles classified as donations and informational materials are excepted from the Section 122 tariff.
• Duty drawback: Drawback is available with respect to the additional duties imposed under the Section 122 order.
• Chapter 98: Goods properly entered under Chapter 98 provisions, pursuant to applicable CPB regulations, are generally exempt, except for entries under 9802.00.80, 9802.00.40, 9802.00.50, and 9802.00.60. For these tariff codes, the Section 122 tariff applies to the value of repairs, alterations, or processing performed, as described in the applicable subheading. For 9802.00.80, the Section 122 tariff applies to the value of the article assembled abroad, less the cost or value of such products originating in the United States.
• Goods in transit: The tariff order includes a narrow exception for goods already in transit to the United States. The exception applies to goods loaded onto a vessel at the port of loading and in transit on the final mode of transit to the United States before 12:01 a.m. eastern standard time on February 24, 2026 and are entered before 12:01 a.m. eastern standard time on February 28, 2026.

The Section 122 tariff order does not incorporate the country-specific IEEPA reciprocal tariff levels, tariff level caps, or product-specific exceptions previously negotiated in the final or preliminary ARTs. Trade partners that benefited from special IEEPA tariff product exceptions, such as Switzerland, Liechtenstein, and the European Union (EU), no longer retain those protections. Trade partners that negotiated caps to the IEEPA tariffs, including the EU, Switzerland, Liechtenstein, Japan, and South Korea, where the US tariff was limited to either (i) a 15% IEEPA tariff rate or (ii) only the MFN rate if it exceeded 15%, have lost those caps.

Forthcoming Section 301 investigations

The United States Trade Representative (USTR) has indicated that it intends to use Section 301 investigations as a principal replacement pathway for country-specific measures previously pursued through the IEEPA tariffs and ARTs. In an official statement on February 20, USTR stated that it will “[i]nitiate several investigations under Section 301” and that it expects these investigations “to cover most major trading partners.”⁷ USTR intends “to conduct these investigations on an accelerated timeframe.” USTR also noted that, if investigations conclude responsive action is warranted, “tariffs are one tool that may be imposed.”

USTR further stated that the investigations are expected to address topics including “industrial excess capacity, forced labor, pharmaceutical pricing practices, discrimination against US technology companies and digital goods and services, digital services taxes, ocean pollution, and practices related to the trade in seafood, rice, and other products.”

About Section 301

Section 301 of the Trade Act of 1974⁸ assigns authority to USTR for investigating a foreign government practice that is “unjustifiable and burdens or restricts United States commerce” and to take appropriate action to remedy the burdensome practice. The Trump administration has used Section 301 in other tariff actions, which have withstood court challenges. If USTR decides to take the actions authorized by Section 301 (e.g., impose duties or other import restrictions, withdraw or suspend trade agreement concessions, or enter into agreements with the foreign government to eliminate the conduct in question), there will be additional notice and comment periods concerning any specific remedial actions.

Possibility of new Section 232 sectoral investigations

Media reports suggest that the US Department of Commerce Bureau of Industry and Security may also be planning to initiate new investigations under Section 232 of the Trade Expansion Act of 1962 as part of the effort to replace the IEEPA tariffs. According to the reports, these investigations would be initiated to consider the imposition of tariffs on large-scale batteries, cast iron and iron fittings, plastic piping, industrial chemicals, telecommunications equipment, and power grid equipment. The details of these proposals are unknown, and it is unclear whether BIS has decided to proceed with the investigations. If initiated, the BIS will post notices of request for public comments to the Federal Register.

^{1 Presidential Proclamation 11012 of February 20, 2026: “Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems,” 91 FR 9339; and CSMS # 67844987 - Imposing Temporary Section 122 Duties, February 23, 2026.
2 Executive Order 14389 of February 20, 2026: “Ending Certain Tariff Actions,” 91 FR 9437; and CSMS # 67834313 - Ending Collection of International Emergency Economic Powers Act Duties, February 22, 2026.
3 See Truth Social post of February 20, 2026 by President Trump.
4 19 U.S.C. § 2132.
5 19 U.S.C. §§2411-2420; and 15 C.F.R. Part 2006.
6 The Section 122 Annex II list excludes certain subheadings under HTSUS chapters 48 and 49 related to books and other printed materials, which had been on the IEEPA Annex II list. These subheadings may be covered by the informational materials tariff exception instead.
7 “Ambassador Greer Issues Statement on Supreme Court IEEPA Decision,” USTR, February 20, 2026.
8 19 U.S.C. §§2411-2420, and 15 C.F.R. Part 2006.}

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