What Every Multinational Should Know About …The New Section 122 Tariffs and Preserving IEEPA Refund Rights

In the immediate aftermath of the U.S. Supreme Court’s decision invalidating tariffs imposed under the International Emergency Economic Powers Act (IEEPA), the Trump administration has moved quickly to replace those tariffs with a new across-the-board tariff under Section 122 of the Trade Act of 1974. Specifically, on February 20, 2026, President Trump issued a series of proclamations and executive actions imposing a 10% across-the-board tariff under Section 122, effective February 24, 2026 at 12:01 a.m. ET, while simultaneously directing that the IEEPA tariffs be terminated “as soon as practicable. By Truth Social post the next day, President Trump stated that he would be directing the tariffs in fact be set at 15 percent, the statutory maximum under Section 122.” Customs and Border Protection thereafter announced on February 22, 2026, that it would end IEEPA tariff collection at 12:00 a.m. ET on February 24, simultaneously ending the collection of IEEPA tariffs and launching the United States into the Section 122 tariffs (which will soon be replaced by a mix of Section 232 and 301 tariffs).

These developments represent (yet another) unprecedented shift in U.S. tariff policy. Importers are now faced with a complex challenge:

• managing immediate exposure under the new Section 122 tariffs;
• protecting your business from tariffs under new authorities;
• preserving and pursuing refunds for IEEPA tariffs previously paid.

This article accordingly provides an overview of the new Section 122 tariffs and outlines practical steps companies should be taking now to protect their interests in IEEPA tariff refunds.

Overview of the New Section 122 Tariffs

The new Section 122 tariff establishes a baseline 15% duty (once CBP implements the 15% tariff figure provided for in President Trump’s Truth Social post) on a broad range of imports, effectively replacing the now-invalidated IEEPA tariff regime with a different statutory authority.

Key features include:

• The imposition of an across-the-board 15% tariff, implemented through new HTSUS subheading 9903.03.01, replacing the variety of widely varying country-specific global and reciprocal tariffs.
• The application of the tariff to goods entered or withdrawn from warehouse for consumption on or after February 24, 2026 (12:01 a.m.). Importantly, there is a goods-on-the-water exemption, which applies to goods loaded onto a vessel prior to February 24 and entered before February 28, meaning that importers should be paying close attention to ensuring a promptly completed entry process for goods that are close to or at port.
• A USMCA exemption, in that goods qualifying for preferential treatment under USMCA are exempt.
• A provision that goods subject to existing or future Section 232 tariffs are excluded from the Section 122 tariffs, providing certain tariff relief for now (although future Section 232 tariffs may be much higher).
• Annex-based exclusions, which largely mirror prior exemption frameworks. Many exclusions previously applicable under the IEEPA tariff regime have been retained, including exclusions for certain agricultural products, and products subject to the Nairobi Protocol exemption on the basis that they are intended to deal with disabilities.
• Certain textile and apparel goods qualifying under CAFTA-DR also remain exempt.
• Covered goods admitted into FTZs must be entered under privileged foreign status, limiting duty mitigation flexibility

The Trump administration directed the U.S. Trade Representative to monitor conditions and recommend modifications, including potential expansion, reduction, or termination of the tariff.

Overall we view the Section 232 tariffs as the new baseline tariff regime, implemented rapidly and with significant breadth, but subject to ongoing adjustment. The Section 122 tariffs, limited by statute to remain in effect for a maximum of 150 days, unless Congress votes to extend them which is highly unlikely, will effectively serve as the bridge tariff while the Administration quickly works to implement tariffs on a longer-lasting foundation, including by completing pending Section 232 investigations, launching new investigations on other products with a national security angle, and likely launching country-specific Section 301 unfair trade practice investigations, probably based in part on the findings relating to a previous request for comments on unfair foreign trade practices.

At the same time that importers need to cope with the transition to the new Section 122 tariff regime, they also need to be paying close attention to the issue of how to preserve the right to previously paid IEEPA tariffs. While the Supreme Court invalidated the IEEPA tariffs, it did not establish any mechanism for issuing refunds. Instead, the issue has been remanded to the Court of International Trade (CIT), where key questions remain unresolved. These include:

• whether refunds will be required and on what basis;
• whether relief will be limited to litigants who have filed protective 1581(i) protective actions (or whether these litigants will get quicker relief, such as through a successful push for summary judgment);
• whether administrative remedies (e.g., protests or PSCs) are required;
• whether and how CBP will implement any refund process; and
• what role the CIT will play in overseeing any administrative refund process.

As a result, there is currently no defined timeline or procedure for obtaining refunds, and outcomes may depend on a combination of litigation, agency guidance, court rulings, and potentially congressional action.

There is precedent for relatively rapid refund programs, such as has occurred through retroactive renewals of the Generalized System of Preferences, which involved several billion dollars of refunds. But it remains unclear whether a similarly streamlined approach will be adopted here, which would likely require specific directives from the White House to move forward. At the same time, CBP is expected to require some level of affirmative action by importers, and may subject claims to scrutiny.

What Companies Should Be Doing Now

In this environment, companies should take a proactive, “belt-and-suspenders” approach to both preserving refund rights and managing new tariff exposure. Some items to consider:

1.  Identify and Quantify IEEPA Tariff Exposure

• Extract data from ACE to identify all entries subject to IEEPA tariffs.
• Capture entries across all entities, brokers, and ports.
• Quantify total duties paid and create a centralized tracking data set.

Why this matters: A complete and accurate data set will be essential to support any refund claim and to ensure no recoverable amounts are missed.

2. Monitor Liquidation and Preserve Administrative Rights

• Track the liquidation status of all affected entries.
• Evaluate whether post-summary corrections (PSCs) may be available for unliquidated entries.
• File protests for entries approaching liquidation deadlines, where appropriate.

Why this matters: It is unknown right now whether CBP will allow protests based on IEEPA-related reasons. Liquidation may render duties final absent timely action. Administrative remedies may ultimately be required, depending on how the CIT resolves exhaustion issues. Although at some point there may be clarity regarding how such entries should be handled, until that occurs, importers should be looking to preserve all potential avenues for refunds, including by protesting liquidation.

3. Evaluate Filing a Protective Action at the CIT

Over 2000 complaints (likely covering 3000 or more companies, because it is common to include affiliated companies) have been filed under 28 U.S.C. § 1581(i) to seek individual oversight of the refund process. Potential advantages of filing include locking in independent judicial oversight of claims for refunds, adding additional avenues for potential relief, giving a potential avenue for quicker refunds, and avoiding potential impacts on continuous entry bond collateral requirements. Full information can be found here.

In light of these considerations:

• Consider filing a protective action under Section 1581(i).
• Coordinate with counsel to assess timing and scope of ongoing litigation, and the impact on your refund status.

Why this matters: A protective filing may preserve jurisdiction, provide potentially quicker refunds, and ensure participation in any relief that is ultimately granted.

4. Ensure Operational Readiness to Receive Refunds

• Work with customs brokers to extract data and manage filings.
• Confirm ACH/payment mechanisms are in place with CBP.
• Coordinate with brokers and finance teams on refund processing;.
• Sign up for CSMS updates and monitor for information regarding IEEPA refunds, protest requirements, and other IEEPA-related developments.

Why this matters: Even if refunds are issued, companies must be operationally prepared to receive and reconcile them. Also, given the large number of IEEPA tariff claims, there is a statistical likelihood that some tariff claims will be missed by CBP and potentially lost if not identified by the importer of record.

5. Manage the Transition to Section 122 Tariffs (and New Replacement Tariffs)

• Identify products now subject to the 15% tariff.
• Update classification, origin, and landed cost models.
• Assess applicability of exemptions.

Why this matters: Companies are simultaneously pursuing refunds while incurring new tariff exposure.

6. Consider Lobbying the Administration and Congress

• Consider engaging the Administration on new and ongoing tariff investigations.
• Consider how best and whether to advocate your company’s position directly with relevant agencies.
• Secure support from your Congressional delegation on tariff priorities.

Why this matters: Tariff decisions are being shaped in real time, and companies that proactively advocate are better positioned to mitigate risk and influence outcomes.

7. Integrate Refund Strategy with Broader Supply Chain Planning

• Evaluate sourcing strategies in light of new tariffs.
• Consider mitigation tools (e.g., FTZs, drawback, sourcing shifts).
• Align procurement, legal, and finance teams.

Why this matters: The IEEPA decision is not an endpoint; it is part of a broader shift toward ongoing tariff volatility, supported by still unknown tariff authorities at still unknown tariff levels.

*           *           *

The transition from IEEPA tariffs to a new Section 122 tariff regime represents a rapid and unprecedented shift in U.S. trade policy. Companies must now navigate both backward-looking refund opportunities and forward-looking tariff exposure at the same time.

Those that act quickly to preserve rights, organize data, and align internal teams will be best positioned to recover significant amounts and manage risk going forward. Those that delay may find that refund opportunities are lost or that new tariff exposure is not effectively controlled.

If you have questions about these developments — including strategies for preserving IEEPA refund rights, complying with the new Section 122 tariffs, or adapting supply chains to the evolving tariff landscape — the Foley International Trade & National Security and Supply Chain teams are available to assist.