America's Global Import Surcharge Just Expired — By Law, Not By Choice

How a Balance-of-Payments Law Became a Global Tariff

Section 122 of the Trade Act of 1974 lets the President impose a temporary import surcharge, capped by statute at 15% ad valorem, to address what the law calls "fundamental international payments problems" — large balance-of-payments deficits, currency depreciation risk, or international payments disequilibrium. It was invoked on February 20, 2026, the same day the Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) did not authorize the tariffs the administration had been using previously. Proclamation 11012, published in the Federal Register on February 25, 2026, cites the U.S. goods trade deficit (roughly $1.2 trillion in 2024 and again in 2025) and a current account deficit the administration's advisors described as 4.0% of GDP — the largest since 2008 — as the basis for invoking the law. The proclamation set the surcharge at 10% ad valorem on nearly all imports, effective 12:01 a.m. EST on February 24, 2026, with specific carve-outs detailed in two annexes.

A Discrepancy Worth Flagging

The proclamation's own operative text sets the rate at 10% ad valorem, and that is the figure EconoLens can verify directly against the Federal Register document. Several trade-compliance publications report that the rate was subsequently raised to 15% — the statutory maximum — within days of the original proclamation. EconoLens could not locate a Federal Register amendment or CBP notice confirming that increase at the time of writing, so this article reports the rate as proclaimed (10%) and flags the reported increase to 15% as an unconfirmed secondary claim rather than presenting either figure as settled fact. This is exactly the kind of discrepancy that should be resolved with a primary-source check before any follow-up coverage cites a specific rate.

Why It Expired Instead of Being Renewed

Section 122 caps a presidentially imposed surcharge at 150 days specifically so that any longer-term tariff requires buy-in from Congress, not just the executive branch. Extending it needs an Act of Congress — in the Senate, that effectively means 60 votes to overcome a filibuster — and no extension bill advanced to a floor vote before the deadline. That made expiration the default outcome, not a policy choice by the White House. The proclamation's own text (paragraph 17) is explicit that the 150-day limit is a hard statutory ceiling "unless extended by an Act of the Congress."

What Replaces It

The administration has been building replacement tariff authority under Section 301 of the same 1974 Trade Act, which — unlike Section 122 — carries no statutory rate cap and no automatic expiration. EconoLens covered one piece of that replacement structure this morning: USTR's July 23 final action imposing 10-12.5% tariffs on 60 economies over forced-labor import enforcement. A separate 25% Section 301 tariff on Brazil took effect July 22. Neither of those actions is a like-for-like replacement for the broad, all-countries reach of the Section 122 surcharge — Section 301 actions are typically narrower, tied to a specific investigation and finding, country by country or issue by issue, rather than a single across-the-board rate. That means the tariff landscape after July 24 is less a clean swap and more a patchwork, with some goods and countries facing higher rates than before, others lower, and the net effect still being worked out.

What to Watch Next

Trade-compliance analysts have estimated the expiration could pull the average effective U.S. tariff rate down by several percentage points, though EconoLens has not verified a specific before/after figure against an official government estimate and is not reporting one as fact. Worth watching: whether Customs and Border Protection issues a formal CSMS message confirming wind-down mechanics for goods in transit, and whether the administration pursues a fresh Section 122 invocation, a new emergency authority, or broader Section 301 action to refill the gap the expiration leaves.

It Also Survived a Court Fight Along the Way

The surcharge's path to its statutory expiration wasn't uncontested. The Court of International Trade ruled on May 7, 2026 that the surcharge exceeded the President's authority under Section 122, finding the administration had not properly identified a qualifying balance-of-payments deficit. The Court of Appeals for the Federal Circuit stayed that ruling on May 12, allowing CBP to keep collecting the 10% surcharge from all importers except the three named plaintiffs while the government's appeal proceeded. That appeal was still pending when the 150-day clock ran out on its own terms — meaning the surcharge's end was determined by the statutory deadline, not by the litigation, but the litigation was a live threat to it for roughly the second half of its life. Worth knowing before treating this as an uncontested, purely administrative sunset.