What Is Section 122 and Is It Refundable?
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TL;DR – Section 122 is a 10% tariff surcharge introduced on February 24, 2026 under the Trade Act of 1974. It uses HTS codes 9903.03.xx. It is not refundable through CAPE – it's a completely separate program from IEEPA that started the same day IEEPA duties ended.
What Is Section 122?
Section 122 of the Trade Act of 1974 grants the President authority to impose a temporary surcharge on imports to address balance-of-payments deficits. On February 24, 2026, a 10% surcharge was imposed under this authority on most imports, using codes in the 9903.03.xx range.
The timing is notable: February 24, 2026 is also the date CBP deactivated IEEPA codes in the TR-011 report – the same day IEEPA's duty collection period effectively ended. Importers who had been paying IEEPA duties immediately began paying Section 122 duties instead.
Section 122 surcharges have a statutory time limit. The current surcharge is expected to remain in effect for approximately 150 days from imposition, expiring around July 2026, unless extended or modified.
Section 122 Is Not Refundable Through CAPE
CAPE covers only IEEPA tariffs – duties collected under the International Emergency Economic Powers Act using codes 9903.01.xx and 9903.02.xx. Section 122 was imposed under entirely different statutory authority.
There is no announced refund mechanism for Section 122 duties. If your entries from late February 2026 onward show 9903.03.xx codes, those duties are not part of the IEEPA refund program and cannot be recovered through CAPE.
How to Tell Section 122 from IEEPA
| HTS Code | Program | Authority | Start Date | Refundable? |
|---|---|---|---|---|
| 9903.01.xx | IEEPA fentanyl + reciprocal | IEEPA | Feb 2025 | ✅ Yes (CAPE) |
| 9903.02.xx | IEEPA replacement rates | IEEPA | Apr 2025 | ✅ Yes (CAPE) |
| 9903.03.xx | Section 122 surcharge | Trade Act 1974 | Feb 24, 2026 | ❌ No |
The simplest check: look at your entry date. Entries from February 2025 through early February 2026 may contain IEEPA codes. Entries from late February 2026 onward are more likely to contain Section 122 codes. Pull your ES-003 and filter by HTS code prefix to confirm.
Section 122 Exemptions
Not all goods are subject to the Section 122 surcharge. The following are explicitly excluded:
- Civil aviation products (9903.03.05)
- Steel, aluminum, automobiles, copper, lumber, semiconductors, and other goods already subject to Section 232 tariffs (9903.03.06)
- Canadian goods qualifying under USMCA (9903.03.07)
- Mexican goods qualifying under USMCA (9903.03.08)
If your goods fall into one of these categories, check whether the exemption code appears on your entries before assuming Section 122 applies.
Frequently Asked Questions
I have both IEEPA and Section 122 codes on different entries – what happens? Your IEEPA entries (9903.01/9903.02, February 2025 – early February 2026) are eligible for CAPE. Your Section 122 entries (9903.03, late February 2026 onward) are not. These are separate entry populations with separate treatment. File CAPE for your IEEPA entries and pay Section 122 duties as a current business expense.
Will Section 122 be challenged in court like IEEPA was? Possibly. Section 122 tariffs imposed under the Trade Act of 1974 are subject to the same type of judicial review as IEEPA tariffs. Legal challenges have been discussed in trade law circles. However, no refund mechanism exists now, and speculating on future court outcomes is not useful for current planning.
When does Section 122 expire? The surcharge is subject to a statutory time limit of approximately 150 days, placing the expiration around July 2026. It can be extended or modified by executive action. Monitor Federal Register notices and CSMS updates for any changes to the expiration date.