Section 122 Jumps to 15%: How This Affects Your IEEPA Refund Claim

Breaking: Bessent Confirms 15% Rate This Week

In a Monday press briefing, Treasury Secretary Scott Bessent confirmed that the administration will increase Section 122 tariffs from 10% to 15% effective immediately. The increase applies to virtually all imports currently subject to the Section 122 “replacement” tariffs imposed after the Supreme Court struck down IEEPA duties in February.

“The economic data supports a stronger response,” Bessent stated. “We're seeing continued trade imbalances that require decisive action. The 15% rate brings us in line with our trading partners' effective rates when you account for VAT and regulatory barriers.”

The increase was not unexpected. During his confirmation hearings, Bessent indicated that the initial 10% rate was a placeholder and that the administration was reviewing “the appropriate level to achieve trade rebalancing goals.” Internal Treasury documents leaked to Bloomberg last month showed modeling for rates between 12% and 20%.

Section 122 vs IEEPA: Why Your Refund Is Still Safe

The most important point for importers to understand: Section 122 tariffs and IEEPA refunds are completely separate legal matters. The increase in Section 122 rates has zero impact on your right to recover IEEPA duties paid before February 20, 2026.

Here's why:

• • Different legal authority. IEEPA tariffs were imposed under the International Emergency Economic Powers Act and declared unconstitutional by SCOTUS. Section 122 tariffs are imposed under the Trade Act of 1974 and remain legally valid (for now).
• • Different time periods. IEEPA tariffs covered August 2019–February 2026. Section 122 tariffs cover February 2026 forward. There's no overlap.
• • Different refund mechanisms. IEEPA refunds flow from constitutional invalidity under Learning Resources v. Trump. Section 122 refunds would only occur if those tariffs are separately challenged and struck down.

Translation: You get back every dollar you paid under IEEPA, regardless of what happens to the replacement tariffs. The two are legally distinct.

Why the 15% Rate Actually Helps Your Refund Case

Counterintuitively, the increase in Section 122 tariffs strengthens the political case for processing IEEPA refunds quickly. Here's the logic:

More current pain = more pressure for relief. At 10%, importers were grumbling about the replacement tariffs. At 15%, they're screaming. The National Retail Federation called the increase “economically destructive” and is pressing Congress to block extension of Section 122 tariffs when they expire in July. Major importers are threatening supply chain relocations and inventory destocking.

Congressional math is getting worse for the administration. The 15% rate makes it significantly harder for the administration to secure congressional extension of Section 122 tariffs beyond the July 24 expiration. Moderate Republicans who were on the fence about a 10% extension are now openly opposing a 15% extension. This creates pressure to “give something back” to importers — and IEEPA refunds are the obvious release valve.

Media and industry attention is intensifying. The 15% rate is generating significantly more negative coverage than the initial 10%. Wall Street Journal editorial board called it “economic vandalism.” Financial Times ran a front-page story on supply chain disruption. This media pressure translates to political pressure to show “fairness” by processing refunds faster.

Key Details: What Does and Doesn't Change

No stacking with existing tariffs. The 15% Section 122 rate does not stack with Section 232 (steel/aluminum) or Section 301 (China) tariffs that were already in place. Goods subject to higher existing rates continue to pay the higher rate, not 15% on top. However, some importers have reported confusion at ports, with CBP initially assessing both rates before correcting entries.

EU exemption confirmed (mostly). Bloomberg reported Monday that EU imports will be exempt from the Section 122 increase, maintaining the 10% rate. Treasury has not officially confirmed this, but CBP has reportedly received informal guidance to “hold” EU entries pending clarification. Auto imports from Germany are apparently exempt entirely, though steel and aluminum from EU countries still face Section 232 rates.

July 24 expiration still holds. The 15% increase does not extend Section 122's 150-day statutory authority. The tariffs still expire July 24 unless Congress votes to extend them. If anything, the higher rate makes congressional extension less likely, not more.

No change to IEEPA refund timeline. The Court of International Trade is proceeding with refund framework development on the same schedule. CIT's initial status conference is expected March 10–16. The Section 122 increase has no bearing on that calendar.

What Importers Should Do RIGHT NOW

The Section 122 increase creates both immediate operational challenges and strategic opportunities. Here's your action plan:

1. Separate your IEEPA and Section 122 exposure

Run separate calculations for (a) IEEPA refunds owed to you (August 2019–February 2026) and (b) Section 122 tariffs you're paying now (February 2026–July 2026, assuming no extension). These are distinct financial exposures that require different strategies.

2. Accelerate your IEEPA refund claim if you haven't filed

The 15% rate is generating political heat that favors faster refund processing. If you haven't joined the CIT litigation yet, do it now while the political winds are favorable. The government's own stipulation guarantees refunds to “all current and future similarly situated plaintiffs,” but you have to actually file to be covered.

3. File protests on Section 122 assessments

Even if Section 122 tariffs are currently legal, file administrative protests on entries subject to the 15% rate. If the tariffs are later struck down (either by courts or by congressional non-extension), protests preserve your right to administrative refunds. The protest clock starts with each entry, so don't wait.

4. Model scenarios for the July 24 cliff

With Section 122 tariffs now at 15%, congressional extension is even less likely. Smart importers are running scenarios for what happens if tariffs drop to zero (or back to pre-IEEPA Section 301/232 rates) on July 25. Inventory planning, supplier contracts, and pricing should all reflect this possibility.

5. Track EU exemption guidance

If you import from EU countries, monitor CBP's handling of your entries closely. The exemption reports are not yet official, and ports are handling EU goods inconsistently. Keep records of any overcharges for potential refund claims.

The Political Math Is Getting Worse for the Administration

Here's what the Section 122 increase means in political terms: the administration is now collecting tariffs at the highest effective rate since 1930 while simultaneously owing importers $175 billion in refunds. This is politically unsustainable.

Senator Susan Collins (R-ME), who was already skeptical of tariff policy, called the increase “punitive to American businesses and consumers.” Senator Lisa Murkowski (R-AK) stated she would “not support any extension of Section 122 at the 15% rate.” These are votes the administration needs to extend tariffs past July.

Meanwhile, importers' political leverage is increasing. The combination of current tariff pain and pending refund claims gives businesses a strong case for congressional intervention. Expect intensified lobbying for both faster IEEPA refunds and Section 122 non-extension.

The Bottom Line

The Section 122 increase to 15% is unambiguously bad for current import costs. But it's strategically good for IEEPA refund prospects. Higher current tariffs create more pressure for relief, and IEEPA refunds are the only relief valve the administration can actually open without congressional approval.

Focus on two parallel tracks: protect your current operations from 15% tariff exposure (inventory management, supplier contracts, protests) while pursuing your IEEPA refund claim aggressively (CIT litigation, documentation preservation, interest calculations).

The political math strongly favors importers right now. Use it.