Tariffs Expired at Midnight. New Ones Started the Same Minute.

A Tariff "Expiration" That Never Delivered Relief

Section 122 of the Trade Act of 1974 caps emergency tariff action at 150 days without congressional extension. President Trump invoked it on February 20, 2026, hours after the Supreme Court struck down the administration's earlier IEEPA tariffs. The 10% global levy took effect February 24.

Every importer who had that expiration date circled got nothing from it. The clock ran out at 12:01 a.m. on July 24, and the government had a replacement ready to file the instant the old authority lapsed.

The Same-Minute Swap

New Section 301 tariffs of 10% to 12.5% landed on 60 trading partners the same minute Section 122 expired. USTR opened the underlying investigations back on March 12, framing the duties as a response to countries failing to ban imports made with forced labor.

Ten percent applies to countries that committed to adopting a forced-labor import ban. The higher 12.5% rate applies to countries that didn't. Either way, the tariffs reach an estimated 99.4% of U.S. imports by value. There is no meaningful category of import-dependent business sitting outside this net.

What It Actually Costs: Two Real Shipments

Numbers from the court filing put a dollar figure on the abstraction. Burlap & Barrel, a New York spice importer, expects to owe about $13,888 on five shipments worth roughly $124,407 already moving toward U.S. ports. Collective Horology, a California watch retailer, expects about $8,280 on three shipments worth $69,000.

Both companies say no domestic supplier can replace what they import. Single-origin spice sourcing and handmade watch components don't have a "buy American" substitute sitting on a shelf. The duty gets paid at the border, in cash, before a unit of that inventory ever sells.

Small Businesses Already Suing

The Liberty Justice Center filed suit in the U.S. Court of International Trade hours after the new tariffs took effect, arguing USTR skipped the country-by-country findings Section 301 requires and instead applied a near-uniform rate across 60 economies at once. The complaint is filed as a proposed class action covering every importer of record who now owes the new duty.

This isn't these plaintiffs' first fight. Burlap & Barrel challenged the original Section 122 tariff back in March, and that case moved fast, reaching a three-judge Court of International Trade panel within weeks. No injunction has paused collection on the new Section 301 duties. Importers are paying now and litigating in parallel.

The Underlying Numbers Were Already Bad

Even before this swap, tariff pressure was showing up across the small business sector. Research from the New York Fed's Liberty Street Economics found 55% of goods firms and 67% of retail firms nationally reported tariff-related financial challenges in 2025. Roughly 80% of retail firms said import input prices rose year over year.

About 60% of firms absorbed at least some of that cost increase themselves rather than passing it fully to customers. That absorption has to come from somewhere, and for a business without a deep cash reserve, it usually comes from delayed reorders or a maxed-out credit line.

Why This Hits Ecommerce and Import-Dependent Sellers Hardest

A Shopify or Amazon operator with containers already on the water when a tariff regime changes has no lead time to reprice, renegotiate with a supplier, or line up extra capital. The duty is assessed on landed value at whatever rate is active the day the shipment clears customs, not the rate that was active when the purchase order was placed.

That mismatch between purchase-order timing and duty-assessment timing is exactly what turns a routine inventory buy into an unplanned cash crunch. A seller who budgeted for a 10% Section 122 rate and gets hit with 12.5% Section 301 on arrival has to find that difference before the goods ever generate revenue.

What's Actually Exempt

USTR carved out a short list of exceptions, so it's worth knowing what doesn't fall under the new rate before assuming your entire shipment is exposed.

• Informational materials, donations, and accompanied baggage
• Articles already subject to separate Section 232 tariffs
• Raw materials without sufficient domestic supply
• Goods that could cause economy-wide disruption if taxed
• Items that can't be sourced domestically in the quantities needed

Everything else from the 60 named economies is presumed covered unless a specific product carve-out applies. Check your HTS classification against the current exemption list before assuming otherwise.

Next Move

Watch the Court of International Trade docket in Burlap and Barrel, Inc. v. Greer. A ruling on class certification would determine whether every importer paying the new duty gets pulled into the case automatically, or whether relief stays limited to the named plaintiffs. Given how fast the earlier Section 122 challenge moved through the same court, a substantive ruling could land within weeks, not months, of the July 24 filing. Until then, the duty is due at the border regardless of how the case turns out.

Frequently Asked Questions