What Section 122 did
The February 20, 2026 proclamation imposed a temporary 10 percent ad valorem import surcharge under Section 122 of the Trade Act of 1974. CBP implemented the surcharge under HTSUS 9903.03.01, with exemption headings 9903.03.02 through 9903.03.11.
As of the current guidance, the surcharge applies to covered imports entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on February 24, 2026 and through 12:01 a.m. eastern daylight time on July 24, 2026 unless modified, suspended, terminated, or extended by Congress.
What trade teams should track
| Data point | Why it matters |
|---|---|
| 9903.03.01 and exemption codes | The Chapter 99 code determines surcharge exposure and exemption basis. |
| Country of origin | Section 122 applies by product of a country, not simply shipping route. |
| Section 232 overlap | CBP guidance excludes certain Section 232-covered goods from the Section 122 duty. |
| Chapter 98 treatment | Some Chapter 98 entries are excluded or partially subject depending on the provision. |
| FTZ status | Covered goods admitted to an FTZ may need privileged foreign status unless domestic status applies. |
| Export or destruction evidence | Normal drawback still needs a qualifying drawback path. |
| Litigation posture | Court-ordered refunds and drawback claims are different recovery paths. |
Recommended enterprise posture
Enterprises should preserve Section 122 duty data now, even if refund strategy is still evolving. That means retaining entry summaries, broker files, Chapter 99 sequencing, exemption support, FTZ admission records, liquidation dates, protest windows, and any exports or destruction that may support drawback.
Pax can model Section 122 as part of a broader tariff recovery review alongside Section 301, Section 232, IEEPA-related programs, and standard duty drawback.