Section 122 Expires July 24, 2026. Three Scenarios for What Happens Next.

Section 122 of the Trade Act replaced IEEPA on February 24, 2026. Most importers are now recalculating landed costs around a 10% flat rate and moving on. But Section 122 has an expiration date built into its statutory authority: July 24, 2026, 150 days from enactment.

That is 143 days from today. Supply chain decisions made now, sourcing shifts, contract negotiations, pricing commitments, are being priced against a tariff that expires in less than five months. Three different things could happen on July 25. Only one of them looks like the current environment.

The 30-Second Version

• Section 122 rate: 10% flat on most imports
• Effective date: February 24, 2026
• Expiration date: July 24, 2026 (150-day statutory authority)
• Exempt now: USMCA partners (Mexico, Canada) and Section 232 products
• Question: What does Congress do on July 25?

What "150-Day Authority" Actually Means

Section 122 of the Trade Act (19 USC section 2132) grants the President authority to impose tariffs for balance of payments purposes, but only for 150-day periods. After 150 days, the authority lapses unless Congress affirmatively extends it or passes new legislation.

This is not a soft expiration. The statutory text is specific: unless extended by Congress, the tariffs terminate. There is no automatic rollover. The 150-day limit was deliberately built into the statute as a check on executive tariff authority, which is why the IEEPA route was used in the first place before the Supreme Court struck it down.

The practical consequence: Section 122 is not permanent trade policy. It is a bridge. The July 24 date is a hard deadline that Congress will have to address before it arrives.

Three Scenarios for July 25, 2026

Congress has three realistic options. Here is what each looks like for importers:

As of early March 2026, there is no announced Congressional plan to extend or replace Section 122. That does not mean it won't happen. It means the timeline is uncertain, which is exactly the planning problem.

How Supply Chain Decisions Are Being Priced Against This Date

Any sourcing shift that takes longer than five months to implement (factory qualification, mold transfer, USMCA documentation setup) is being evaluated against a tariff environment that may not exist when the goods actually ship.

This creates a specific risk for companies currently midway through a Mexico nearshoring transition. If Section 122 expires in July and is not replaced, the tariff advantage of USMCA qualification narrows (though it does not disappear, because Section 301 still applies to China-origin goods). If it is replaced with something at a higher rate or with different exemptions, the calculus changes again.

Companies locking in multi-year pricing or contracts with suppliers right now are essentially betting on one of the three scenarios above. The rational approach is to model all three and understand the sensitivity in each.

What USMCA-Sourced Companies Should Watch

If your goods qualify under USMCA today, you are paying 0% under Section 122. If Section 122 expires without replacement, your landed cost structure does not change (you were already USMCA-exempt). If it is replaced with new legislation, the critical question is whether USMCA exemptions carry over.

The IEEPA framework that preceded Section 122 also had a USMCA exemption, but with an asterisk: fentanyl surcharges still applied to Mexico-origin goods under certain conditions. Whether future legislation preserves a clean USMCA exemption is a policy decision, not a given.

USMCA qualification documentation should be current regardless of how this resolves. CBP audit risk is elevated during periods of tariff transition, because classification and origin questions draw more scrutiny when the financial stakes are higher.

How to Model Both Scenarios in Your Landed Cost Calculations

The most defensible planning approach right now is dual-scenario modeling: calculate landed costs under (a) current Section 122 environment and (b) Section 122 expired, no replacement.

For scenario A, the full tariff stack including Section 122 is the baseline. For scenario B, remove the 10% from the stack for non-China-origin goods (Section 301 and 232 stay). The spread between those two numbers is your Section 122 exposure per unit.

Triangle's free tariff calculator shows the full current stack by HS code and origin. For dual-scenario modeling, run the calculation twice: once as-is, once with Section 122 removed from the stack. The difference is the July 24 risk factor built into your current pricing.