On July 24, 2026, the Trump administration’s Section 122 tariffs—a 10 percent import tariff on goods entering the United States, unless exempted by the president—are set to expire. It is worth assessing what these particular tariffs have achieved, especially as the administration readies new tariffs on 60 different countries that are likely to take effect in the coming weeks. The short answer is very little, if anything—other than raising costs for American businesses, manufacturers, and consumers.
The Trump administration announced its Section 122 tariffs in February, just hours after a U.S. Supreme Court decision blocked the use of the International Emergency Economic Powers Act (IEEPA) to impose country-specific tariffs. These tariffs have proven to be an absolute failure. They did not result in any new trade deals or new market access for American exporters; they did not facilitate new foreign investment in the U.S. economy; nor did they reorient global production patterns in a way beneficial to the security of the United States. Even if one considers, as the Trump administration has argued, the trade deficit to be evidence of a balance-of-payments issue—which it is not—the Section 122 tariffs failed. The trade deficit reached $77.6 billion in May, 41 percent higher than when President Donald Trump announced the Section 122 tariffs.
The Trump administration’s unprecedented and chaotic tariff regime, which includes multiple different tariffs imposed on nearly every product imported from almost everywhere, has inflicted heavy damage on the U.S. economy both because of the extent of the tariffs and their often impulsive implementation. Despite the administration claiming that tariffs would revitalize American manufacturing, they have instead been a source of manufacturing job losses, rising prices, and surging bankruptcies on main streets across the country.
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Why were Trump’s Section 122 tariffs imposed?
After the Supreme Court’s IEEPA decision, President Donald Trump announced a new 10 percent global tariff employing a never-before-used legal authority: Section 122 of the 1974 Trade Act. He later suggested a 15 percent tariff, but the administration never followed through.
Trump’s use of Section 122 was remarkable for several reasons. First, in a July 2025 legal filing, the administration admitted that the statute did not “have any obvious application” since trade deficits are “conceptually distinct from balance-of-payments deficits.” And yet, the president imposed them anyway, almost daring the courts to stop him.
Second, the statute permits the president to impose Section 122 tariffs for only up to 150 days, unless Congress agrees to extend the duties. Since congressional approval was unlikely, given that Congress had already passed measures of disapproval regarding several of Trump’s earlier tariffs, these particular tariffs were simply a stopgap measure. Several foreign governments therefore have preferred to engage the administration on its more permanent, pending Section 301 tariffs, rather than make any commitments in exchange for a short-term tariff reduction.
A trade policy that continues to hurt businesses, workers, and consumers
For many American businesses, workers, and consumers, the Trump administration’s Section 122 tariffs were an unwelcome and unjustified penalty—and an additional cost for millions of people already struggling with high cost-of-living expenses. Studies have consistently shown that American businesses and consumers are paying the vast majority of the Trump administration’s tariffs. The Federal Reserve Bank of New York, for example, found that nearly 90 percent of the economic burden associated with the change in tariffs in 2025 fell on U.S. firms and consumers. While the share of the burden passed on to consumers varies by product and has likely changed over time, the Yale Budget Lab has calculated that the implied pass-through of tariffs on consumer goods ranges from roughly 46 to 86 percent for core goods.
Few parts of the economy have felt the sting of Trump’s tariff madness as acutely as the nation’s small businesses. Small businesses are less capable of absorbing the cost of the Trump administration’s tariff chaos. They often lack the resources, global reach, or purchasing power of larger firms, making it harder to shift sourcing strategies. And they lack the budgets to obtain the legal help to navigate the tariff refunds and exclusions processes.
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After facilitating an initial wave of IEEPA tariff refunds, the Trump administration now seems intent on making it harder for small businesses to claim the refunds they deserve. On May 29, the administration told a federal judge that it intended to appeal an earlier judicial order allowing all companies that paid the invalidated duties to seek refunds, not just those that filed lawsuits. Simultaneously, U.S. Customs and Border Protection reversed its original position, claiming it now lacked the authority to refund “finally liquidated” entries without a specific court order. Importers—including many small businesses—may now need to take on the extra expense of filing a legal claim against the government for the tariff refunds they are due.
Most IEEPA tariff refunds will never reach consumers
Tariffs are paid at the border by importers, who usually pass on at least part of those additional costs through their supply chains to retailers and, ultimately, to consumers. And yet, despite the Trump administration being required to repay importers the $166 billion in revenue it collected through its illegal IEEPA tariffs, most consumers will likely never see any of that money paid back to them or their families.
The government paid roughly $70 billion in tariff refunds in May and June—enough that net tariff revenue (collections minus refunds) was even in May and negative in June. Yet even if importers were to receive a full refund, it is unlikely they would—or could—effectively distribute all that money to the individual consumers who bought their products at higher prices. This isn’t a matter of legal uncertainty or selfishness; it is the result of a legitimate inability to untangle normal business expenses from the increased costs from the Trump administration’s tariffs. For one, the importer of record (the entity due a refund check) typically is not the entity that sold a good to a consumer, so figuring out the cost of higher tariffs on distributors and other upstream parts of the supply chain makes a final calculation of each consumer’s tariff bill difficult.
In other instances, the administration’s tariffs forced companies to take on higher expenses in ways that are hard to quantify. Some firms, for example, paid higher shipping costs to ensure their imports arrived before a tariff deadline hit. To avoid raising prices, some brands dipped into their cash reserves, while others took out loans, paused new hiring, or decreased other expenses, such as marketing or advertising, to cover the costs.
This leaves thousands of American businesses in a difficult position, caught in a cycle of litigation—and often lacking the resources to pay for the legal representation needed to file a new claim or sue the federal government for the tariff refunds they rightly deserve. Examples from the front lines are telling. The Greenbar Distillery in California, for instance, applied for a $90,000 refund only to receive a fraction of that amount, a delay that forced the owner to cut staff. Similarly, Florida-based toy company Basic Fun received a mere 5 percent of its claim, with the CEO describing the speed at which refunds have been paid as “trickling.”
What will happen when Trump’s Section 122 tariffs expire?
For anyone looking for a tariff reprieve after the Section 122 tariffs’ expiration date, the signal from the U.S. trade representative is that the next round of Trump tariffs could, in some cases, be even higher than those imposed under IEEPA or Section 122. That is because the administration is readying new Section 301 tariffs with preliminary rates between 10 and 12.5 percent for 60 different countries. It is likely that these tariffs would layer on top of other duties already in place—and on top of additional duties currently being considered through other Section 301 investigations.
If the past is any guide, though, the more likely scenario is that whatever is initially announced by the administration will remain very much subject to change, further injecting uncertainty into the market and hurting the ability of businesses to appropriately adjust their sourcing, investment, and hiring practices. For many businesses, the Section 122 tariffs are particularly galling because while they have been ineffective from a trade policy perspective, they have made the already tight budgets of many small businesses even tighter, forcing many to raise prices and delay expansions. Perhaps not surprisingly, small-business bankruptcies have increased 67 percent in the first quarter of 2026 over the previous year.
The U.S. Court of International Trade ruled in May that the Section 122 tariffs were unlawful—a decision that was later stayed by the Federal Circuit Court of Appeals—but the court’s injunction was limited to the specific plaintiffs in the case. This left every other importer still subject to the 10 percent tariff. Many businesses are no doubt reviewing legal means, including by potentially joining a class action lawsuit, to recoup the tariffs they paid; but legal fees are often prohibitive.
Conclusion
American businesses are already struggling with declining consumer sentiment—which neared an all-time low in May—and signs of weakening consumer spending. Few will find the administration’s chaotic trade policies, and the increasing legal uncertainty caused by its tariff refund posture, helpful in the face of such challenges. The Section 122 tariffs have been another unnecessary expense for American businesses and consumers, one of many sources of economic uncertainty caused by the Trump administration’s economic agenda and war in Iran.