Trade & Import in Layman's Terms  •  Issue 3  •  July 28, 2026

Section 122 Is Out. Section 301 Is In.

Plain-language guidance for business leaders. Not customs or legal advice.

The bottom line for leadership

• Section 122 expired July 24, 2026; a new Section 301 tariff (10% or 12.5%) replaced it the same day.
• Most importers pay roughly the same — the rate barely moved.
• The real cost lands on your highest-volume Asian suppliers (China, Vietnam), which sit in the 12.5% band.
• The big shift isn't the rate — it's that the new tariff has no scheduled expiry. Budget as though it's permanent.

What happened

In February 2026 the Supreme Court struck down the earlier "IEEPA" tariffs. The White House replaced them with a flat 10% surcharge (Section 122) — but that tool is capped at 150 days by law, so it expired July 24, 2026. Duties didn't fall: the same day, a new tariff under Section 301 took over. The key difference is that Section 301 has no time limit. (Its legal basis is a finding that 60 countries fail to block goods made with forced labor, but the tariff applies broadly to imports from those countries — it is not limited to forced-labor goods.) Businesses had about seven weeks' notice from the June proposal, though the final rates landed only days before July 24.

‍

Quick terms: 

• MFN duty = the normal U.S. import duty before any special tariff (the new tariff is added on top). 
• Section 232 = separate tariffs on steel, aluminum, copper and autos (left out of the new 301). 
• Section 338 = the separate 50% tariff on specified Canadian goods (Aug 19).

What it costs — by country (examples, not the full 60)

For a few trade-deal partners (EU, Taiwan, Japan, Korea, Switzerland) the figure is a combined ceiling — their normal duty and the new tariff together. Confirm your country's treatment.

Takeaway: the rate move is small, but because China and Vietnam sit in the 12.5% band and are among the largest U.S. import sources, that's where the real dollar impact concentrates.

Does it stack with other tariffs?

Yes, mostly. The new tariff is added on top of the normal duty, the older 2018 China tariffs, and any anti-dumping/countervailing duties. It does not stack on Section 232 goods (steel, aluminum, copper, autos are carved out), and it never overlapped the expired Section 122. Stacking itself isn't new — but this tariff now piles on top of the older China tariffs, so China-origin stacks get taller.

What's exempt

Exempt: 

• USMCA-qualifying goods (Canada & Mexico); non-qualifying goods just move from a 10% surcharge to a 10% duty. This is separate from the July 20 Section 338 tariffs (50%), which apply even to Canadian CUSMA-qualifying goods.
• Section 232 goods (steel, aluminum, copper, autos); semiconductors, patented pharmaceuticals, civil aircraft; energy, fish, potash, critical minerals; and goods already on the water before July 24 (if entered before July 28).

⚠️ Important — electronics. 

• The old surcharge exempted "electronics" broadly. 
• The new tariff clearly exempts semiconductors, but is narrower on finished consumer electronics. 
• Confirm your HTS classification before assuming your electronics are still exempt.
  

What to do now?

1. Confirm your HTS classification first — it drives your rate and every exemption.

2. Check whether your imports are impacted — our new Tariff Checker instantly flags whether your HS codes appear on any of the new or upcoming tariff lists.

3. Confirm origin / USMCA status — qualifying goods stay exempt. CUSMA certificate generator

4. Update your July 24 entries — make sure your broker applies the new 301 rate, not the expired surcharge line.
5. Review your customs bond — higher, stacking duties can breach your limit and trigger CBP notices.

5 questions every C-suite should ask their Supply Chain Team:

1. What share of our import value comes from the 12.5% countries, and what's the added annual duty?
2. Which products leaned on the old "electronics" exemption — and do they still qualify?
3. How much of our Canada/Mexico volume is CUSMA-certified, and what's the cost if it isn't?
4. Is our customs bond sized for these higher, stacking duties?
5. If this tariff has no expiry, what's our 12-month plan — sourcing, pricing, contracts?

Need help? 

A&A Customs Brokers (large & enterprise) — 1-800-663-4270, aacb.com. 

BorderBuddy (small & mid-sized) — 1-877-409-8163, borderbuddy.com.

About TILT — Trade & Import in Layman's Terms. Trade policy has become a wall of acronyms, and too often the people explaining it care more about sounding smart than being understood. TILT is the antidote: plain-language briefings on what changed, what it costs, and what to do — no jargon, no ego. The name is deliberate: the trade landscape is tilting under everyone's feet, and this series helps you keep your footing. Written for executives and operators who make decisions, not for specialists who already speak the language.

Sources: USTR Section 301 fact sheet; Federal Register notice; BDO; Global Trade Alert. Rates and rules change frequently and remain subject to litigation — confirm your specific treatment before relying on this.