After the IEEPA Ruling: A Customs Broker's Action Guide to Section 122

The Supreme Court struck down IEEPA tariffs on February 20, 2026. Within hours, the administration replaced them with a Section 122 surcharge. Here is exactly what customs professionals need to do right now — before the window closes.

The Supreme Court's 6-3 decision in Learning Resources, Inc. v. Trump hit on February 20, 2026 and immediately sent the trade compliance world into crisis mode. Chief Justice Roberts, writing for the majority, held that tariff authority is a "branch of the taxing power" reserved to Congress under Article I of the Constitution — IEEPA does not authorize the President to impose tariffs.

Within hours, the administration responded by invoking Section 122 of the Trade Act of 1974, imposing a new 10% universal import surcharge that jumped to 15% (the statutory maximum) the following day. The surcharge is effective February 24, 2026.

The result: a cascading set of compliance obligations that demand immediate attention. This guide covers what changed, what it means, and — most importantly — what to do about it.

What Actually Happened: The Two-Part Shock

Part One: IEEPA Tariffs Terminated

The Court did not issue a stay or give the administration time to adjust. The ruling took effect immediately. CBP notified importers that IEEPA-based tariff collections would stop effective February 24, 2026.

But here is the critical operational detail that is tripping people up: as of February 23, CBP had not yet updated the Automated Commercial Environment (ACE) system to remove IEEPA tariff codes. Cargo was still reporting IEEPA codes for release purposes. CBP stated it was "working with other government agencies to fully examine the implications" and would provide ACE technical guidance "as soon as it becomes available."

Do not remove IEEPA codes from your ACE entries yourself until CBP issues explicit CSMS guidance. Monitor the Cargo Systems Messaging Service daily.

Part Two: Section 122 Kicks In

Section 122 of the Trade Act of 1974 has never been invoked by any president. It authorizes a temporary surcharge of up to 15% on imports for up to 150 days without Congressional approval. The current surcharge:

• Rate: 15% (the statutory maximum)
• Effective date: February 24, 2026
• Expiration: July 24, 2026 (150 days), unless Congress acts
• Legal authority: Trade Act of 1974, Section 122

This is not the same legal instrument as IEEPA. Courts evaluating its validity have no precedent to work from. Expect litigation — but also expect the surcharge to remain in place while the courts work through it.

Section 122: What Is and Is Not Covered

Exempt Categories (Not Subject to the 15% Surcharge)

The proclamation carves out several categories:

Already Subject to Section 232 (Not Stacked)

Products already subject to Section 232 tariffs — steel, aluminum, copper, lumber, automobiles, and auto parts — are excluded from the Section 122 surcharge. Section 232 rates continue to apply as before. There is no double-stacking.

Important: Section 301 Is Unchanged

The SCOTUS ruling and Section 122 have no effect on Section 301 China tariffs. Those operate under the Trade Act of 1974 and remain fully in force. If your goods are subject to Section 301, those duties continue — and Section 122 stacks on top for non-232 goods from China.

The $133 Billion Refund Problem

Between the IEEPA tariff programs going live and the SCOTUS ruling, CBP collected approximately $133.5 billion in IEEPA-based tariffs. The Court's opinion deliberately did not address whether refunds are owed or how they would be processed. This is now the biggest open question in trade law.

Here is what customs professionals need to know about protecting clients' refund rights:

The 180-Day Protest Window

Importers must file a protest with CBP within 180 days after liquidation of an entry to preserve their right to a refund. This clock is running on every IEEPA-affected entry.

Action item: Pull a report of all entries liquidated in the past 150 days that paid IEEPA tariffs. Flag entries approaching the 180-day window and file protests now — even if the refund process is unclear. Failing to protest means waiving the claim entirely.

Court of International Trade (CIT) Actions

Approximately 2,000 importers had already filed cases at the CIT before the SCOTUS ruling. The Trump administration has signaled it will contest refund issuance in court. If your clients have substantial IEEPA tariff exposure and have not filed at CIT, consult with trade counsel immediately. The protest and CIT processes are separate but complementary.

ACH Banking Information Is Now Critical

Effective February 6, 2026, CBP issues all duty refunds electronically — paper checks are no longer available except with an approved waiver. If your ACE portal banking information is incorrect or missing, any refund CBP attempts to issue will fail. Failed ACH deliveries result in rejected refunds with no interest accruing.

Log into ACE right now and verify your ACH banking details. This is especially urgent given the potential volume of IEEPA refund processing that may follow litigation.

The February 28 De Minimis Deadline

Five days from now, another major compliance deadline hits.

The de minimis exemption (duty-free treatment for goods under $800) was suspended for most imports effective August 29, 2025. International postal carriers and e-commerce operators have been in a transitional remittance period since then.

Effective February 28, 2026: Carriers handling postal and international mail shipments must use the ad valorem duty method exclusively. Switching between calculation methods is no longer permitted. Quarterly reporting transitions to mandatory use of the Pay.gov International Mail Duty worksheet, with payment due by the 7th business day after the close of each month.

If you handle any volume of small parcel imports — e-commerce, direct-to-consumer, international mail — confirm your operations team is aligned with this change before the weekend.

ACE Transition: What to Monitor

The gap between the legal change and the systems change is where errors happen. Here is what to watch for in the coming days:

CSMS messages to monitor:

• CBP CSMS system update announcing removal of IEEPA tariff codes from ACE
• Guidance on Section 122 classification and chapter 99 HTS codes for the new surcharge
• Instructions on how to reclassify entries currently in the pipeline

Practical guidance while awaiting CSMS updates:

• Continue filing entries as currently configured until CBP issues system guidance
• Document all entries filed during the transition period (February 20-28) meticulously
• Flag any entries that may need post-entry correction once ACE is updated
• Communicate proactively with importers about potential duty adjustments

Your Compliance Checklist: Actions Ranked by Urgency

Immediate (This Week)

• Verify ACE ACH banking information for all clients and your own brokerage before any refund processing begins
• Pull IEEPA protest report — identify all entries within 90 days of their 180-day protest window and queue them for filing
• Monitor CSMS daily for ACE system update guidance on IEEPA code removal and Section 122 codes
• Identify "on the water" entries — goods loaded before February 24 and entered before February 28 are exempt from the Section 122 surcharge; document this status for every eligible shipment
• Confirm de minimis compliance — verify your February 28 transition to mandatory ad valorem method is operationally ready

This Month

• Classify goods against Section 122 exemptions — run your top 20 HTS codes against the exemption categories to identify immediate savings opportunities
• Audit Section 232 coverage — confirm which products are excluded from Section 122 due to existing 232 orders and ensure entries reflect this correctly
• Review Section 301 exposure — confirm that the SCOTUS ruling has not affected your Section 301 tariff calculations (it has not, but auditing now prevents errors)
• Consult trade counsel on CIT actions for any client with more than $500K in IEEPA tariff exposure

Before July 24

• Model Section 122 expiration scenarios — what happens to landed costs when the 150-day surcharge expires or is extended by Congress? Update your importer clients' forecasts
• Audit USMCA certificates of origin ahead of the July 1 USMCA joint review — undocumented preferential duty claims are at elevated audit risk this year

What Section 301 Professionals Need to Know

While Section 122 dominates the immediate agenda, do not let Section 301 slip from your attention. These rates operate independently and are escalating on schedule:

• 178 Section 301 exclusions remain in effect through November 10, 2026
• Medical gloves: Rate increases to 100% in 2026 (from 50%)
• Face masks and certain medical products: Rate increases to 50% in 2026
• Batteries and critical minerals: Rates escalated January 1, 2026

If your clients import any of these products from China, the Section 301 rate ladder applies regardless of the IEEPA ruling.

UFLPA: Enforcement Continues at Full Pace

Do not mistake the tariff transition for a reduction in UFLPA enforcement. CBP has reviewed more than 18,000 shipments with aggregate value of $3.81 billion since UFLPA took effect in June 2022. Enforcement is expanding into new sectors:

• Lithium and lithium-ion battery components
• Copper and copper products
• Steel and aluminum from Xinjiang-linked supply chains
• PVC and related plastics
• Automotive supply chains touching any of the above

The "assembled outside China" defense no longer works if upstream inputs trace to UFLPA Entity List companies. CBP updated its enforcement statistics dashboard in January 2026 with new interactive filters — use it to benchmark your product categories against detained shipment patterns.

The Bottom Line

The IEEPA ruling is a legal watershed, but the practical impact for customs brokers is a compliance sprint. The Section 122 replacement is immediately in effect. Refund claims require immediate attention. ACE is in transition. And five days from now, another de minimis deadline arrives.

The brokers who navigate this week well will be the ones who acted methodically: verified banking info, pulled protest reports, monitored CSMS, and communicated clearly with importer clients about what changed and what stayed the same.

The fundamental reality of tariff compliance has not changed. What changed is the legal instrument — and the window for preserving your clients' refund rights is open right now.

TariffLens helps customs brokers and importers manage classification accuracy across rapidly changing tariff schedules. As duty rates and tariff programs shift, accurate HTS classification is the foundation of every downstream compliance decision. Learn how TariffLens can help your team stay ahead.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Tariff regulations change frequently; verify current requirements with CBP official guidance and qualified trade counsel before making compliance decisions.