Section 122 Tariffs Face Fresh Legal Challenge as Importers Attack Trump's 10% Surcharge

The most important U.S. tariff development of the past week is not a new rate announcement. It is a new legal challenge to the tariff regime that importers are actually paying today. On Monday, two small businesses sued the Trump administration over the 10% global import surcharge imposed under Section 122 of the Trade Act of 1974, arguing that the White House cannot use a different statute to restore broad tariffs after the Supreme Court struck down the earlier IEEPA tariffs.

That matters because Section 122 is now the legal foundation for the baseline tariff layer affecting a wide range of U.S. imports. Reuters reported the lawsuit this week, while CNBC highlighted the broader political fallout from the Supreme Court’s February decision and the administration’s scramble to replace the lost tariff authority. USTR’s Presidential Tariff Actions page still lists the February 20 proclamation that imposed the temporary import surcharge, confirming that the policy remains in force even as its legal footing is being tested.

Why this challenge matters

For importers, the immediate issue is practical rather than academic. If the lawsuit succeeds, the 10% Section 122 surcharge could become far less durable than many companies assumed. Trade compliance analysis this week has framed Section 122 as a stopgap tool: temporary, litigation-prone, and designed to bridge the administration toward more durable Section 301 and Section 232 actions. Trade Compliance Resource Hub’s tracker notes that the Section 122 action is currently scheduled to expire on July 24, 2026 unless Congress extends it. Plante Moran similarly warns that multiple plaintiffs are already contesting whether Section 122 can legally be used this way at all.

In other words, this is now the central tariff question for the next quarter: will the current 10% global surcharge survive long enough to shape contracts, sourcing, and landed-cost planning through the summer, or will the courts narrow the administration’s options again?

What importers should watch next

First, watch the litigation calendar. A private-business challenge is important because it broadens the fight beyond the earlier state-led lawsuits and increases the odds of a faster, more detailed court record on the scope of Section 122. Second, watch USTR and Commerce for the administration’s backup plan. CNBC noted that, after losing at the Supreme Court on IEEPA, the White House has already pivoted toward wider Section 301 investigations and continued reliance on Section 232. That means even if Section 122 weakens, tariff exposure may not disappear; it may simply become more sector-specific, country-specific, and permanent.

Third, companies should stop treating the 10% surcharge as a stable background assumption. If your margins are sensitive to tariff swings, now is the time to rerun scenarios with and without Section 122, especially on goods that could later face overlapping Section 301 or Section 232 duties. Our landed cost calculator is the fastest way to model current duty stacks, and the site’s HTS search tool helps identify whether a product is also exposed to Section 301 or other overlays.

Bottom line

This week’s lawsuit is the clearest sign yet that the post-IEEPA tariff regime is still unsettled. The administration has kept tariffs alive by shifting to Section 122, but the legal vulnerability has not gone away. For importers, brokers, and trade teams, that means the current 10% surcharge should be treated as active but contested. It is real enough to affect customs entries today, yet uncertain enough that procurement, pricing, and inventory decisions should be stress-tested against multiple outcomes. Until the courts or Congress provide clarity, tariff planning in 2026 remains less about predicting a single stable rate and more about managing a moving legal target.