What Every Multinational Should Know About …Managing the Aftermath of the Supreme Court’s Historic IEEPA Tariff Decision (Part I)

Understanding the New Section 122 Tariffs and Preserving IEEPA Refund Rights

The Supreme Court’s reversal of tariffs imposed pursuant to the International Emergency Economic Powers Act (IEEPA) has triggered a cascading series of events. These include a forced pivot by the Trump administration towards alternative tariff authorities, activity at the Court of International Trade (CIT) aimed at securing refunds, and behind-the-scenes jockeying by companies seeking to position themselves to claim those tariff refunds.

To help deal with the aftermath of this historic decision, the Foley International Trade & National Security and Supply Chain teams are publishing a series of articles outlining key actions that companies should be taking now to navigate the post-decision landscape. The series covers:

• Part I: Understanding the New Section 122 Tariffs and Preserving IEEPA Refund Rights
• Part II: Preserving the Right to IEEPA Tariff Refunds
• Part III: Refund-Related Issues for Importers of Record
• Part IV: Customs & Supply Chain Issues for Importers of Record
• Part V: Refund-Related Issues for Companies That Indirectly Paid IEEPA Tariffs
• Part VI: Avoiding Common Pitfalls When Dealing with Refund-Related Issues
• Part VII: Understanding the Future Landing Spot for Tariffs

This article (Part I) 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.

What Are the Section 122 Tariffs?

Just days after the IEEPA tariffs were overruled, the Trump administration moved to replace them with a new tariff under Section 122 of the Trade Act of 1974. 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 directing that the IEEPA tariffs be terminated “as soon as practicable.” The following day, in a Truth Social post, President Trump announced that the rate would instead be set at 15%, the statutory maximum under Section 122. U.S. Customs and Border Protection (CBP) thereafter announced on February 22, 2026, that it would end IEEPA tariff collection at 12:00 a.m. ET on February 24, effectively ending the collection of IEEPA tariffs and ushering in the new Section 122 tariffs. To date, the 15 percent tariff announcement is not yet implemented, reportedly due to issues relating to how it would interact with some of the lower-tariff framework agreements reached with other countries.

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

• managing immediate exposure under the new Section 122 tariffs;
• protecting themselves from tariffs under new authorities;
• preserving and pursuing refunds for IEEPA tariffs previously paid; and
• preparing for the pivot to new tariff authorities and new tariff rates.

Overview of the New Section 122 Tariffs

The new Section 122 tariff establishes a baseline 10% duty (or 15%, if and when CBP implements the 15% tariff figure provided for in President Trump’s Truth Social post and later reiterated by Scott Bessent on March 4, 2026) on a broad range of imports, effectively replacing the now-invalidated IEEPA tariff regime with a different statutory authority.

Key features include:

• Imposing an across-the-board 10% tariff (with plans to increase to 15%), implemented through new HTSUS subheading 9903.03.01, replacing the variety of widely varying country-specific global and reciprocal tariffs.
• Applying the tariff to goods entered or withdrawn from warehouse for consumption on or after February 24, 2026 (12:01 a.m.). Previously, there was a goods-on-the-water exemption, which applied to goods loaded onto a vessel prior to February 24 and entered before February 28, but this timeframe has passed.
• A United States-Mexico-Canada-Agreement (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 or 301 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 (Dominican Republic-Central America Free Trade Agreement) also remain exempt.
• Covered goods admitted into foreign trade zones (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. These efforts likely will include completing pending Section 232 investigations, launching new Section 232 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 and prior USTR reports regarding the same.

While 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. Though the Supreme Court invalidated the IEEPA tariffs, it did not establish any mechanism for issuing refunds. Instead, the issue has been remanded to the 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. We will be covering these issues in detail in Part II of this series.

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, although Judge Eaton at the CIT is doing his best to create a reasonable mechanism for quick refunds. At the same time, CBP is pushing 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 may be needed 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 (although all current information is that CBP is not allowing PSCs that are filed based solely on IEEPA-related claims).
• 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, and avoiding uncertainty relating to how the Court of Appeals for the Federal Court may handle issues on appeal, including with regard to importers who have not filed their own 1581(i) protective actions. We will be detailing these issues in Part II of this series.

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, thereby maximizing potential avenues for relief and minimizing uncertainty related to potential appeals.

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 and are enabled with ACE.
• 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. CBP underscored that one of the reasons why it is difficult to handle refunds is that so few importers have enabled ACH functionality within ACE. 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 new Section 122 tariffs and which ones potentially are eligible for the listed exclusions.
• Update classification, origin, and landed cost models.

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.

Frequently Asked Questions

FAQ #1: What statutory authority allows the President to impose the new tariffs?

The new tariffs were imposed under Section 122 of the Trade Act of 1974 (19 U.S.C. § 2132), which authorizes the President to impose temporary tariffs or quotas when the United States is experiencing balance-of-payments pressures or a significant deterioration in international monetary reserves. Section 122 allows tariffs of up to 15% for a period of up to 150 days, unless Congress acts to extend the measure.

FAQ #2: What products are covered by the Section 122 tariffs?

The Section 122 tariffs apply broadly to most imported goods, unless an exemption applies. Unlike some tariff programs that target specific sectors or countries, the Section 122 tariffs operate as a baseline tariff covering most imports regardless of country of origin.

FAQ #3: Are USMCA-qualifying goods subject to the Section 122 tariffs?

No. Goods that qualify for preferential tariff treatment under the United States-Mexico-Canada Agreement (USMCA) are exempt from the Section 122 tariffs, provided that the importer properly claims USMCA treatment and maintains the required certification and documentation.

FAQ #4: How do the Section 122 tariffs interact with Section 232 tariffs?

Goods that are subject to existing or future Section 232 tariffs are excluded from the Section 122 tariffs. This means that products already subject to steel, aluminum, copper, or other Section 232 national security tariffs generally will not be subject to the Section 122 tariff on top of those duties. Importers should monitor developments closely, as additional Section 232 investigations are expected, and those tariffs may be significantly higher than the Section 122 tariff levels.

FAQ #5: Are there product exclusions from the Section 122 tariffs?

Yes. The administration has carried forward a number of exclusions contained in Annexes to the implementing proclamations, including exclusions that largely mirror those previously applicable under the IEEPA tariff regime.

Examples include exclusions for certain: (1) agricultural products; (2) products eligible under the Nairobi Protocol addressing goods designed for persons with disabilities; and (3) certain textile and apparel goods qualifying under CAFTA-DR. Importers should review the Annexes carefully to determine whether any product-specific exclusions apply.

FAQ #6: How are goods admitted into foreign trade zones treated?

Goods admitted into foreign trade zones (FTZs) that are subject to the Section 122 tariffs generally must be admitted in privileged foreign status. This means that the duty rate applicable at the time of admission will apply when the goods enter U.S. commerce, limiting the ability to use FTZ procedures to mitigate tariff exposure. Companies using FTZs should review their zone admission strategies and compliance procedures to account for this requirement.

FAQ #7: Can the Section 122 tariffs be modified or terminated before the 150-day limit?

Yes. The administration has directed the Office of the United States Trade Representative (USTR) to monitor economic conditions and recommend adjustments. As a result, the tariffs could be expanded, reduced, or terminated prior to the 150-day statutory deadline. At the same time, the administration is expected to pursue longer-term tariff authorities, meaning that even if the Section 122 tariffs end, other tariffs may replace them.

The Foley International Trade & National Security Practice

The Foley International Trade & National Security Team covers the full gamut of international trade needs, including for tariffs, Customs, supply chain/supply chain integrity, trade remedies/antidumping/countervailing duty, export controls, economic sanctions, and CFIUS national security filings. Our Tariff & International Trade blog regularly publishes practical guidance, like this client alert, on all international trade topics and compiles it by topic area on the Foley Tariff & International Trade Resources blog. Click Here to Register for our email list to receive future emails and practical international regulatory compliance tips, including our biweekly What Every Multinational Should Know articles.