Following the U.S. Supreme Court’s February 20, 2026, ruling that prior tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful, the Trump administration moved quickly to replace them.
Within hours, a new global 10% tariff was imposed under Section 122 of the Trade Act of 1974, effective February 24, 2026, applying to most imported products from all countries for 150 days.
What Is Exempt?
Not all goods are affected. Key exemptions include:
- USMCA-qualifying goods from Canada and Mexico
- Products already subject to Section 232 tariffs, such as steel, aluminum and automobiles
- Critical minerals
- Pharmaceuticals
- Certain electronics
For Canadian and U.S. businesses, goods moving under a valid USMCA claim remain protected, but non-qualifying imports will face the additional duty on top of existing rates.
What to Watch For
The situation continues to evolve. Key developments to keep on your radar:
- The administration has signalled it may increase the rate to 15%, the maximum permitted under Section 122
- New Section 301 investigations are underway that could lead to further country or sector-specific tariffs in the months ahead
- The surcharge is currently set to expire on July 24, 2026, though Congress has the ability to extend it
Duty Drawback Opportunity
Businesses that both import and export goods during this 150-day window should take note. Duty drawback is available under Section 122 tariffs, allowing recovery of up to 99% of duties paid on eligible entries. This is a meaningful cost-recovery opportunity worth discussing with your customs broker now.
How Universal Logistics Can Help
The tariff landscape is shifting quickly, and the cost implications for your supply chain can be significant. Our team is here to help you make sense of the changes and take the right steps to protect your business. We can assist with:
- Reviewing your imports to assess exposure under the new Section 122 tariff
- Confirming USMCA eligibility to ensure that qualifying goods do not pay unnecessary duties
- Identifying duty drawback opportunities on eligible shipments
- Keeping you informed as the situation develops, including any rate increases or new Section 301 actions
Do not wait for the next change to catch you off guard. Reach out to the Universal Logistics team today and let us help you navigate the current tariff environment with confidence.
