US Tariff Shift Looms As Section 122 Duty Expires

On July 24, 2026, the United States will enter a critical transition period for its tariff policy, with the expiration of the temporary Section 122 global tariff and the possible rollout of new Section 301 duties expected to significantly alter the current trade framework.

The 10% global surcharge imposed by President Donald Trump under Section 122 of the Trade Act of 1974 on February 24, 2026, was introduced as an emergency replacement after the U.S. Supreme Court overturned the administration's emergency tariffs under the International Emergency Economic Powers Act (IEEPA).

Section 301 Tariffs Expected To Replace Expiring Section 122 Duties

The most likely scenario is that the Office of the United States Trade Representative (USTR) will finalize its Section 301 tariffs related to alleged forced labor practices within the coming days and implement them from July 24 to prevent a gap in U.S. tariff measures.

The Section 301 investigation has already completed its public comment period and is being accelerated in an effort to take effect before the Section 122 tariff expires.

Under this scenario, around 60 U.S. trading partners would face Section 301 tariff rates of either 10% or 12.5%.

Meanwhile, more than 100 countries and regions currently subject to the 10% Section 122 tariff, including Uganda, Paraguay, Kenya, Ghana and Panama, could see their additional tariff rates fall to zero because they are not covered by the forced labor-related Section 301 investigation.

The reason is that the forced labor Section 301 measure does not apply to these economies, and the Trump administration would have limited legal grounds to continue imposing tariffs on them after the Section 122 measure expires.

However, the 60 trading partners covered by the Section 301 action account for 99% of U.S. imports, meaning the remaining countries returning to zero additional tariffs would have limited impact on the overall U.S. economy.

New Section 301 Duties To Stack On Existing Tariff Structure

Like previous IEEPA and Section 122 tariffs, the new Section 301 duties would be imposed on top of existing Most Favored Nation (MFN) tariff rates.

A significant number of products are expected to receive exemptions, including food products, pharmaceuticals, aircraft components, rare earth materials and other strategic goods. Products covered under the U.S.-Mexico-Canada Agreement (USMCA) and goods already subject to Section 232 tariffs would also be excluded.

On July 15, the Trump administration announced that a 25% Section 301 tariff on imports from Brazil would take effect from July 22, following the completion of a separate Section 301 investigation into alleged unfair trade practices by Brazil.

The Brazil tariff decision provides a precedent for the upcoming forced labor-related Section 301 measures, demonstrating the administration's willingness to use Section 301 as a major tariff tool.

Additional Section 301 Investigation Could Increase Tariff Pressure

The USTR has not yet finalized the results of another Section 301 investigation focused on industrial overcapacity.

The investigation was launched at the same time as the forced labor-related probe and targets 16 of the United States' largest trading partners.

The administration has not rushed to announce the results of the overcapacity investigation, suggesting it may be preserved as a negotiation tool rather than immediately converted into tariffs.

If both Section 301 measures are implemented together, the combined tariff impact could exceed the current 10% Section 122 duty.

Limited Possibility Of Extending Section 122 Tariffs

Another possibility, though considered unlikely, is that the USTR may fail to complete the forced labor Section 301 tariff process before the July 24 deadline, or that President Trump may seek to maintain tariffs on smaller countries not included in the Section 301 action.

In that case, Trump could attempt to announce a second Section 122 tariff measure to continue applying a 10% global tariff rate.

The administration could also seek congressional approval for an extension, but there has been no indication that the Trump administration has requested such an extension.

The Section 122 tariff framework is already facing legal challenges. On May 7, 2026, the U.S. Court of International Trade (CIT) ruled that the Section 122 tariffs were invalid, although an appeals court temporarily allowed the tariffs to remain in effect.

Trump may determine that continuing through litigation and addressing potential refunds later would be preferable to allowing tariffs on certain countries to disappear immediately.

Regardless of the outcome, July 24 is expected to mark a significant turning point for U.S. tariff policy, with a major restructuring of import duties likely to affect global trade flows and U.S. trading partners.