IEEPA + Section 122 Implications
Importers across the U.S. have been rattled with news of additional tariffs in the way of Section 122 that President Trump announced, then re-affirmed over the weekend. What we expect is at minimum, a 10% tariff via Section 122, but possibly a 15% tariff.
Regarding IEEPA tariffs – An Executive Order was issued February 20, 2026 stating the tariffs will not longer be in effect and, “as soon as practicable, shall no longer be collected”. As of this morning, we have received official messaging from U.S. CBP that sets IEEPA tariffs to end as of 12:00 a.m. eastern time February 24th, 2026.
Please note this is for the IEEPA Fentanyl and IEEPA Reciprocal tariffs only – Section 301 tariffs on China are not affected, Section 232 tariffs are not affected i.e. Steel, Aluminum, Copper, Automobiles & Parts, Advanced Semiconductors, Wood Products – upholstered furniture, kitchen cabinets and vanities.
Regarding Section 122 new tariffs being imposed, the effective date is February 24 12:01 a.m. through July 24, 2026, 12:01 a.m., eastern standard time – for now the Presidential Proclamation that was published shows 10% however there was a Truth Social post saying this was going to be raised to 15%, so it could change anytime.
Section 122 exceptions
9903.03.01 is the new code for the 10% tariff (this is in addition to the general rate of duty) (expected to rise to 15%)
This additional duty does not apply to Chapter 98 (TIB goods, US Goods returned for example, etc…) except for goods entered under heading 9802.00.80 and subheadings 9802.00.40, 9802.00.50 and 9802.00.60. For subheading 9802.00.40, 9802.00.50 and 9802.00.60 the additional duty applies to the value of repairs, alterations, or processing performed, as described in the applicable subheading. For heading 9802.00.80, the additional duty applies to the value of the article assembled abroad, less the cost or value of such products of the US, as described.
9903.03.02 There is an exception for goods (1) loaded onto a vessel at the port of loading and in transit on the final mode of transit prior to entry into the United States, before 12:01 a.m. eastern standard time on February 24, 2026; and (2) are entered for consumption, or withdrawn from warehouse for consumption, before 12:02 a.m. eastern standard time on February 28, 2026
9903.03.03 There are exceptions for HS Codes listed from the bottom of page 3 to the top of page 8
9903.03.04 There are exceptions for these specific products not the entire HS Code (page 8 of the attached Annex I)
9903.03.05 There are exceptions for articles that are civil aircraft (all aircraft other than military aircraft); their engines, parts and components; their other parts, components and subassemblies; and ground flight simulators and their parts… these HS Codes are on page 9, 10 and the top of page 11 on the attached Annex I. Please note that many of your clients will import products with these HS Codes but the exception is for Civil Aircraft parts only.
There is an Annex that was provided which further outlines some items that are excepted from Section 122. These are essentially the following subsets and groups:
9903.03.06 Essentially this is for articles subject to Section 232 – if you pay Section 232 you do not have to pay this additional tariff. Articles of iron or steel, derivative articles of iron or steel, articles of aluminum, derivative articles of aluminum, passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans and cargo vans) and light trucks and parts of passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans and cargo vans) and light trucks, semiconductor articles, semi-finished copper and intensive copper derivative products, wood products, or medium- and heavy-duty vehicles or medium- and heavy-duty vehicle parts.
9903.03.07 products of Canada entered under USMCA
9903.03.08 products of Mexico entered under USMCA
9903.03.09 products of Dominican Republic-Central America-United States Free Trade Agreement
9903.03.10 Articles that are donations by persons subject to the jurisdiction of the United States, such as food, clothing and medicine, intended to be used to relieve human suffering
9903.03.11 Articles that are informational materials, including but not limited to publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks and news wire feeds
As news is just breaking, we will have further updates on next steps and developments as they are available!
