Section 122 Expires July 24. Here Are the Decisions You Need to Make Before Then.
Section 122 tariffs expire in 90 days. With Section 301 incoming and a CIT lawsuit pending, here are the practical sourcing, inventory, and pricing decisions FBA importers need to make right now.
The Section 122 tariff has 93 days left.
It took effect February 24, 2026, after the Supreme Court struck down IEEPA. By statute, it expires 150 days later, on or about July 24, 2026. The President can't extend it unilaterally. Congress hasn't moved on extension legislation, and bipartisan support is doubtful given that the "Reclaim Trade Powers Act" is moving in the opposite direction.
Most importers we talk to are treating July 24 like a finish line. It isn't. It's a fork in the road with three different paths, and each one has different implications for your sourcing, your inventory, and your pricing. The decisions you make in the next 90 days will determine which path you're on.
Here's what's actually on the table and how to think about each scenario.
Where Section 122 stands as of late April
Quick recap for anyone who's been heads down on Q2 inventory planning.
The legal status. Section 122 imposed a 10% surcharge on imports from all countries (with limited exemptions for Section 232 goods, USMCA-qualifying products, and a few categories like pharmaceuticals and critical minerals). Treasury Secretary Bessent suggested in early March that the rate could rise to the 15% statutory cap, but no formal proclamation has followed. The 10% rate is what's actually on your customs entries today.
The lawsuit. On March 5, 24 state attorneys general sued at the Court of International Trade, arguing Section 122 was applied unlawfully. A separate business coalition lawsuit was filed March 9. The CIT held a combined oral argument on April 10. The three-judge panel pressed the government hard on whether modern floating exchange rates can even produce the kind of "balance-of-payments problem" the statute requires. A ruling is pending.
The Section 301 pipeline. USTR opened parallel Section 301 investigations on March 11 targeting 16 economies (including Vietnam, Cambodia, Bangladesh, India, Mexico, the EU, Korea, Japan, and Taiwan) for "structural excess capacity." Public comments closed April 15. We covered the implications in our Section 301 investigations article. USTR is moving on an "accelerated timeline" because they need the new tariffs ready before Section 122 expires.
So the question isn't really "what happens July 24." The question is which combination of three possible events plays out, and when.
The three scenarios
Scenario 1: Section 122 expires, Section 301 fills the gap. Most analysts think this is the base case. USTR concludes the excess capacity investigation by mid-July, announces country-specific Section 301 rates on the 16 economies, and the new tariffs take effect on or near July 24, just as Section 122 sunsets. There's no gap, no relief, just a different legal authority producing similar or higher rates with no statutory cap and no time limit.
Scenario 2: Section 122 gets struck down before July 24. The CIT panel sounded skeptical of the government's arguments at the April 10 hearing. If they rule against the administration, importers who paid Section 122 from February 24 onward could become eligible for refunds, similar to the IEEPA refund process now winding through the courts. The administration would appeal, but a CIT loss combined with a Federal Circuit affirmation could create a refund window before Section 301 is even ready.
Scenario 3: Section 122 expires cleanly, Section 301 isn't ready yet. The least likely outcome, but worth modeling. If USTR misses the July deadline (the timeline is genuinely tight given the comment period only closed April 15), there could be a brief window where most imports fall back to MFN-only rates plus existing Section 301 (China) and Section 232 (steel, aluminum, autos, copper). For non-China imports, that's a meaningful temporary cost reduction.
The asymmetry matters. Scenarios 1 and 2 mean tariffs continue or grow. Scenario 3 means temporary relief. The base case (Scenario 1) is also the worst case for most FBA importers because Section 301 has no rate cap.
The math at three different rate points
Take a $5.00 FOB silicone phone case sourced from Vietnam, MFN rate 3.4%.
Today, under Section 122 at 10%:
- MFN duty: 3.4% = $0.17
- Section 122: 10% = $0.50
- Total duties: $0.67 per unit
After July 24, if Section 301 lands at 25% on Vietnam (Scenario 1):
- MFN duty: 3.4% = $0.17
- Section 301 (Vietnam): 25% = $1.25
- Total duties: $1.42 per unit
After July 24, if Section 122 is struck down and Section 301 isn't ready (Scenario 3):
- MFN duty: 3.4% = $0.17
- Total duties: $0.17 per unit
The spread between the worst case and best case is $1.25 per unit on a $5 FOB product. On 100,000 annual units, that's a $125,000 swing in your duty bill alone, before freight, FBA fees, or any other cost. You can run your specific products through MarginStack's calculator to see what each scenario does to your margin.
This is why "wait and see" isn't a strategy. Each scenario triggers a different inventory and pricing response, and the lead time on cross-Pacific imports is 6 to 10 weeks. If you wait until July 25 to find out what happens, your Q4 inventory is already on the water at whatever cost the new regime imposes.
The practical decisions to make in the next 90 days
Five things worth working through before July.
Decide your inventory exposure for Q4. Most FBA sellers planning for Q4 are placing orders in May or June for July or August arrival. If you place those orders now, the goods will land before Section 122 expires and pay the current 10%. If you wait until July, they'll likely pay whatever Section 301 imposes, which could be 2-3x higher. Front-loading is the conservative move, but it ties up cash and storage. The decision depends on whether your business can absorb 90 days of additional inventory financing for products that might otherwise face significantly higher duties.
Track Section 122 as a separate line item on your entries. This is probably the easiest thing on this list, and many sellers haven't done it. Talk to your customs broker. Make sure Section 122 is showing as a distinct line on your Form 7501 entries, separate from MFN and any Section 301 duties. If the CIT rules against Section 122 (Scenario 2), you'll need clean records to file for refunds. If your broker has been combining lines, you're going to have a painful audit on your hands. We covered the broader duty stack mechanics in how US import duties stack on Amazon FBA products.
Model price increases for Scenario 1. If you're going to need to raise prices to absorb higher duties, doing it gradually before the deadline is easier than a big jump after. Customers and competitors notice 8% jumps. They don't notice 2% jumps spread over three months. If you think Section 301 is coming at 20-30% on your sourcing country, start moving prices up in May rather than scrambling in August.
Get your sourcing diligence current on countries NOT on the Section 301 list. Most of Asia and the EU are under investigation. The countries that aren't include parts of Africa, Latin America (outside Mexico), Pakistan, and a handful of others. For most FBA categories, these aren't realistic alternatives because the manufacturing infrastructure isn't there. But for some specific categories (textiles from Pakistan, leather goods from various sources, specialty agricultural products), there may be options worth at least pricing out. The point isn't to switch suppliers in 90 days. It's to know your alternatives if rates land at the high end.
Don't bet on Scenario 3. A clean Section 122 expiration without Section 301 ready to fill the gap would be excellent news for importers, but the administration has been preparing for this since February and has every incentive to land the new tariffs on time. Build your plans around Scenario 1 or 2 being the actual outcome. If Scenario 3 happens, it's free upside.
What to watch for
A few specific signals worth tracking over the next 90 days.
The CIT ruling on Section 122. Could come any time. The administration will appeal a loss, but the initial ruling shapes the refund picture and the appellate timeline. If the CIT rules against the government in May or June, refund opportunities open up. We wrote a deeper analysis of the SCOTUS ruling that started this if you want the full legal context.
USTR Section 301 announcements. USTR typically publishes preliminary findings and proposed rates in the Federal Register before final implementation. Watching the Federal Register weekly through May, June, and July is worth the 10 minutes per week. Once preliminary rates are published, you'll have 2-4 weeks of advance notice on the specific country and product impacts.
Treasury Secretary Bessent on rate increases. The Section 122 statutory ceiling is 15%. Bessent floated raising it from 10% to 15% in early March. If that happens before July 24, your duties on Section 122-only products go up 50% in dollar terms (5% to 7.5% on FOB) for whatever weeks remain. Worth being prepared for, even though the administration hasn't moved on it yet.
Congressional action (probably none). Both extension legislation and the Reclaim Trade Powers Act are technically pending, but neither has bipartisan momentum. Don't plan around Congress doing anything by July.
The bigger picture
If you're frustrated by the pace of change, you're not alone. Three months ago, IEEPA was still active. Two months ago, Section 122 was new. Last month, Section 301 investigations launched. Next month, the CIT could rule. The rate environment for FBA importers has changed more in 2026 than it did in any year since the original Section 301 actions in 2018-2019.
The sellers who handle this best aren't the ones who guess right on every scenario. They're the ones who have their cost structure modeled clearly enough that they can re-run the numbers in 30 minutes when something changes, decide on adjustments quickly, and move before competitors.
If your duty stack model is in a spreadsheet somewhere and you haven't touched it since January, that's the first thing to fix. The second is making sure you have a few sourcing alternatives priced out, even if you're not actively switching. The third is tracking Section 122 on your entries so you're ready if the refund window opens.
Three things. Ninety days. One deadline.
Get to work.