What Every Multinational Should Know About …The New Section 122 Tariffs And Preserving IEEPA Refund Rights – International Trade & Investment

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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The application of the tariff to goods entered or withdrawn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.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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