Trump’s Section 122 tariffs expire on July 24: Then what?

July 16, 2026 12:40 PM, EDT

WASHINGTON — President Donald Trump’s double-digit taxes on imports from nearly every country on earth brought revenue to the U.S. treasury last year.

But the money ran out after the Supreme Court struck down Trump’s biggest and boldest tariffs in February.

The question now is can the president’s trade team deliver on its promise to make up for the lost revenue?

A deadline is fast approaching.

After the Supreme Court setback, the President first turned to Section 122 of the Trade Act of 1974 to impose a 10% tariff globally. But Section 122 authorizes the tariff only for 150 days. Trump’s term ends on July 24. Congress would have to increase those tariffs — something lawmakers are unlikely to do in the run-up to the Nov. 3 midterm elections amid voter dissatisfaction over the high cost of living.

But the administration has more durable options: Section 301 of the same 1974 trade law allows the president to impose tariffs and other sanctions against countries found to engage in “unfair,” “unfair” or “discriminatory” trade practices. Trump used Section 301 to impose large tariffs on China in his first term and is invoking them again — most recently as late as July 15 when he announced 25% tariffs on some Brazilian imports, accusing the world’s 11th-largest economy of multiple unfair trade practices.

Containers at the port of Suape in Ipojuca, Brazil. (Mara Ehrlich/Bloomberg)

Trade lawyers and analysts are confident the tariff-happy Trump administration will manage to replace the Section 122 tariffs with larger Section 301 tariffs by the July 24 deadline. “They’re going to raise the tariff wall again,” said trade lawyer Ryan Majerus, a partner at King & Spalding and a trade official for Trump’s first administration and President Joe Biden.

Trump last year tested the limits of — and exceeded — his authority to impose import taxes, a power the U.S. Constitution gives Congress. He invoked the 1977 International Emergency Economic Powers Act (IEEPA) to impose large tariffs on most countries in the world.

He justified the levy, which marked a stunning reversal of decades of US policy in favor of low tariffs and free trade, by labeling America’s long-running trade deficit a national emergency.

The Supreme Court didn’t buy into it, ruling in February that the president can’t use the emergency powers statute to impose tariffs at all. The legal defeat meant the administration had to send refunds to importers who had paid the levy.

As a result, the tariffs have ended up having a windfall impact on the treasury, at least temporarily.

Revenue from import taxes exceeded $31.4 billion last October. Then, after the Supreme Court decision, it dropped to $22 billion in both March and April. As refund checks went out faster than revenues from Section 122 and other tariffs arrived, the numbers turned negative: a small ($42 million) shortfall in May followed by a massive $25.6 billion loss in June.

Trump and Treasury Secretary Scott Besant have vowed to use other legal authorities to recoup the lost income.

Shipping containers at Guangzhou port in Nansha district in Guangdong province, southern China. (Ng Han Guan/AP)

Enter Section 301, which gives the President the power to impose — and adjust — tariffs in response to other countries’ trade practices. But the administration must first check the procedural boxes — gathering comments and holding hearings. There is no limit on Section 301 tariffs. They expire after four years but can be renewed.

So the President has flexibility in how he uses the Section 301 tariffs. Trump can still change them — after clearing procedural hurdles — but he can’t impose them or move them up or down as he often did with the IEEPA tariffs. The uncertainty over Trump’s tariff policy has unsettled businesses, making them hesitant to invest and make decisions because they don’t know what the trade rules are going to be.

Switching to rule-bound 301 tariffs would mean “less uncertainty but no uncertainty,” said Sarah Bianchi, a former U.S. trade official who is now chief strategist for international political affairs at investment research firm Evercore ISI.

The Trump administration has turned to two large Section 301 investigations in its drive to replace lost tariff revenue. One accused 60 countries, which account for 99% of US imports, of failing to take adequate steps to curb imports resulting from forced labor. The second is examining whether 16 US trading partners, including China, the EU and Japan, are overproducing goods, driving down prices around the world and hurting US manufacturers.

The administration has already decided what it wants to do on the issue of forced labour. Invoking Section 301 last month, U.S. Trade Representative Jameson Greer proposed tariffs — 10% on 16 countries and 12.5% ​​on 44 — that are equal to or slightly higher than the 10% Section 122 levy they would replace. But Greer’s office is still receiving public comments on the proposed tariffs and has not yet implemented them.

Nathaniel Halverson, partner at the Baker McKenzie law firm and former U.S. trade official, hopes that Greer’s office will manage to get the forced labor levies in place in time so that there will not be much, if any, “daylight” between them and the expiring Section 122 tariffs. “In fact, they are working as fast as they can legally,” he said.

The administration has not yet completed another Section 301 investigation into alleged overproduction by the 16 countries. Trade lawyer Majerus expects the administration to propose even bigger tariffs in a month or two in that case. He doubts that these will be implemented only after the midterm elections “for obvious reasons.”

Trump, who has proudly called himself “the Tariff Man,” has made it clear that he is seeking to roll back large, worldwide import taxes imposed in 2025. So the new 301 investigation seems like an excuse to do so and could be weak in court, Bianchi said.

“Section 301 is legally quite stable,” he said. “But no one has tried to use it to impose a basically universal tariff. I think there would be legal challenges.”