U.S. 15% Section 122 Tariff In Effect Feb. 24; IEEPA Tariffs Directed to Wind Down, De Minimis Suspension Continues (Updated)
Trade Update • February 21, 2026
Key Points
Update: 10% will be increased to 15% Section 122 Tariff Effective Feb. 24: Applies across the board for 150 days through July 24, 2026.
“In Transit” Exemption: Goods loaded before Feb. 24 and entered before Feb. 28 are exempt.
Tariff Subheadings: 9903.03.01 for Section 122 duty and 9903.03.02–9903.03.11 for exemptions.
USMCA Exemption: Goods qualifying under USMCA are not subject to the Section 122 tariff.
Section 232 Exemption: Products already covered by Section 232 tariffs are exempt to prevent stacking.
Reciprocal Tariff Carryovers: Certain agricultural, pharmaceutical, electronics, vehicle, aerospace, and informational products remain exempt.
CAFTA-DR Textiles and Apparel: Textiles and apparel from CAFTA-DR countries enter duty-free.
IEEPA Tariffs Ending: Agencies directed to cease collection “as soon as practicable,” with no set effective date.
De Minimis Suspension Continues: Duty-free de minimis treatment remains suspended for all countries.
Compliance Reminder: Review HTS classifications, confirm exemptions, ensure ACE entries reflect applicable duties, and monitor CBP guidance for pending implementation instructions.
On February 20, President Donald Trump issued a new proclamation imposing a temporary 10% 15% ad valorem import duty under Section 122 of the Trade Act of 1974.
Update: On February 21, 2026, President Donald Trump said in a social media post he is “raising the 10% Worldwide Tariff on Countries” up to the “fully allowed, and legally tested, 15% level.”
The tariff will take effect February 24 at 12:01 a.m. ET. measure applies on an across-the-board basis and will remain in effect for 150 days, through July 24, 2026, unless modified or terminated earlier – see [Fact Sheet: President Donald J. Trump Imposes a Temporary Import Duty to Address Fundamental International Payment Problems].
In parallel, the administration issued a series of related executive orders, including direction to wind down tariffs imposed under the International Emergency Economic Powers Act (IEEPA) – see [Executive Order: Ending Certain Tariff Actions], while maintaining the current suspension of de minimis treatment – see [Executive Order: Continuing the Suspension of Duty-Free De Minimis Treatment for All Countries].
Overview of Section 122 Tariff
Section 122 authorizes the President to impose temporary import surcharges or quantitative restrictions to address balance-of-payments concerns. The statute permits such measures for up to 150 days without further Congressional action.
“In Transit” Provision
The proclamation includes a narrowly tailored in transit exemption. Goods are exempt from the 10% 15% duty if they were:
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. ET on February 24, and
Entered for consumption before 12:01 a.m. ET on February 28.
Importers relying on this provision should maintain documentation demonstrating vessel loading time, transit status, and entry timing.
Tariff Classification and Reporting Requirements
Goods subject to the Section 122 tariff will be reported under a new subheading:
9903.03.01 – 10% 15% ad valorem Section 122 duty
New subheadings 9903.03.02 through 9903.03.11 will be used to declare various exemptions.
Importers and customs brokers should carefully review:
Annex 1 – Identifies tariff schedule numbers subject to the 10% 15% duty
Annex 2 – Lists tariff subheadings exempt from the duty
Operationally, importers/brokers should validate ACE programming updates and ensure entry summaries properly reflect either 9903.03.01 or the applicable exemption subheading.
Scope of Exemptions
According to the White House fact sheet and the Section 122 proclamation, various categories of goods are exempt from the 10% tariff including but not limited to the following:
1. USMCA-Qualifying Goods
2. Section 232 Goods
3. Carryover Exemptions from Reciprocal Tariffs
4. Textiles and Apparel (which enter duty free) under CAFTA-DR
5. The proclamation carries forward exemptions previously applied under reciprocal tariffs that were struck down by the Supreme Court. These exemptions include:
- Certain agricultural products
- Pharmaceuticals
- Electronics
- Passenger vehicles
- Medium and heavy trucks
- Aerospace products
- Informational materials
Termination of IEEPA Tariffs
In the Executive Order: Ending Certain Tariff Actions, the President directed federal agencies to:
“Take all appropriate steps” to end tariffs imposed under the International Emergency Economic Powers Act (IEEPA) and cease collection of duties.
Notably:
No specific effective date for termination of IEEPA duty collection was provided.
Agencies may redelegate authority internally, including reliance on Section 301 authorities where applicable.
The order directs action “as soon as practicable.”
Until formal implementation guidance is issued, importers should continue monitoring CBP CSMS messages.
De Minimis Suspension Remains in Place
The current suspension of de minimis eligibility remains unchanged. Entries previously ineligible for de minimis treatment remain subject to standard customs procedures.
Compliance Considerations for Importers and Customs Brokers
Review product exposure to 9903.03.01 classification.
Validate exemption eligibility, particularly USMCA and CAFTA-DR claims.
Confirm Section 232 overlap to prevent improper duty stacking.
Assess FTZ inventory strategy in light of privileged foreign status requirements.
Monitor CBP guidance for implementation instructions and ACE programming updates.
Importers should perform a detailed, line-by-line validation of their HTS classifications against Annex 1 and Annex 2 to confirm whether merchandise is subject to new subheading 9903.03.01 or qualifies for an applicable exemption under 9903.03.02–9903.03.11.
Entry summaries must reflect the additional 10% 15% ad valorem duty for all covered goods entered on or after 12:01 a.m. ET on February 24, with appropriate reporting in ACE to avoid post-summary corrections, liquidated damages exposure, or duty underpayment.
How GHY Can Help?
GHY specializes in helping businesses navigate and reduce the impacts of tariffs through strategic solutions tailored to their needs. Our experts can audit your supply chain to identify inefficiencies, uncover cost-saving opportunities, and ensure compliance with evolving trade regulations. We also employ tariff engineering techniques to optimize product classification and sourcing strategies, minimizing duty exposure and maximizing profitability.
By partnering with GHY, your business gains access to the tools and expertise needed to streamline operations and stay competitive in a challenging trade environment.
Contact Us Today! Booking a Meeting, email consult@ghy.com, or call +1 (800) 667-0771.
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