Section 122 of the 1974 Trade Act

Extracted Attributes

• Enactment Date

  1975-01-03

• Legal Citation

  19 U.S.C. § 2132

• Primary Purpose

  Addressing balance-of-payments deficits and dollar depreciation

• Maximum Duration

  150 days (without Congressional extension)

• Parent Legislation

  Trade Act of 1974 (Pub. L. 93–618)

• Maximum Tariff Rate

  15%

Timeline

• The Trade Act of 1974 is enacted, granting the President authority over trade agreements and tariffs. (Source: Wikipedia)

  1975-01-03

• The original authority of the Trade Act expires before being subsequently extended by Congress. (Source: Wikipedia)

  1982-01-01

• The extended authority of the Trade Act of 1974 expires. (Source: Wikipedia)

  2010-01-01

• The U.S. Supreme Court strikes down IEEPA-based tariffs in a 6-3 decision; President Trump issues a proclamation imposing a new 10% tariff under Section 122. (Source: Covington & Burling LLP)

  2026-02-20

• The administration increases the Section 122 tariff rate to the statutory maximum of 15%. (Source: PIIE)

  2026-02-21

• The new 15% global tariffs under Section 122 officially take effect at 12:01 a.m. (Source: Covington & Burling LLP)

  2026-02-24

• Scheduled expiration of the 150-day temporary tariff period unless extended by Congress. (Source: Covington & Burling LLP)

  2026-07-24

Trade Act of 1974

The Trade Act of 1974 (Pub. L. 93–618, 88 Stat. 1978, enacted January 3, 1975, codified at 19 U.S.C. ch. 12) was passed to give the President more power in matters of trade agreements and tariffs. The Act's authority expired in 1982 but was subsequently extended by Congress until 2010.

Web Search Results

• What is Section 122? - Retail Industry Leaders Association

  Section 122 of the Trade Act of 1974 grants the President the authority to impose temporary import restrictions—such as tariffs or quotas—on goods from other countries under specific conditions. Unlike other provisions that require lengthy investigations or international coordination, Section 122 is designed to be a more immediate tool for addressing urgent trade imbalances or retaliatory actions. [...] The provision was originally conceived as a safeguard mechanism, giving the U.S. government a way to respond to economic emergencies or retaliatory trade actions without waiting for multilateral processes to unfold. While Section 122 gives the President the authority to impose temporary tariffs or quotas for up to 150 days, any extension beyond that period requires an act of Congress. This safeguard was built into the Trade Act of 1974 to ensure that longer-term trade restrictions undergo legislative scrutiny and reflect broader political consensus. [...] Specifically, Section 122 allows the President to impose duties of up to 15% or quotas for up to 150 days on imports from all countries, or selectively against countries that maintain unjustifiable or unreasonable restrictions on U.S. commerce. This authority is intended to give the executive branch flexibility to respond quickly to trade practices that may harm U.S. economic interests or to correct significant balance-of-payments deficits. For retailers, Section 122 is problematic because it introduces a layer of unpredictability into the trade environment. While the provision has rarely been used, the court’s moves to block IEEPA tariffs could thrust it into the limelight.

• What Is Section 122? - Shapiro

  Shapiro We Deliver. Problem Solved. Shapiro We Deliver. Problem Solved. Close Menu ## What Is Section 122? ## Understanding Section 122 of the Trade Act of 1974 Section 122 of the Trade Act of 1974 is a U.S. trade law provision that gives the President temporary authority to address serious balance-of-payments deficits or significant declines in the value of the U.S. dollar. It is designed as a short-term economic safeguard tool, allowing the administration to respond quickly to international financial instability or trade imbalances. Unlike other trade enforcement mechanisms that target specific countries or unfair trade practices, Section 122 can be applied more broadly and is primarily focused on macroeconomic concerns rather than individual trade violations. [...] ## Legal Foundation Section 122 is part of the Trade Act of 1974, a major trade statute that also includes authorities such as: While Sections 232 and 301 are more commonly used in modern trade enforcement, Section 122 provides a distinct authority centered on balance-of-payments concerns. ## What Powers Does Section 122 Grant? Under Section 122, the President may: However, these measures are subject to important limitations: ## When Can It Be Used? It may be invoked if: Because of its focus on macroeconomic conditions, Section 122 is rarely used in modern trade policy. Most recent trade actions have relied instead on Section 232 (national security) or Section 301 (unfair trade practices). ## How It Differs from Other Trade Authorities [...] ## How It Differs from Other Trade Authorities | | | | | --- --- | | Authority | Purpose | Scope | Duration | | Section 122 | Balance-of-payments stabilization | Broad/global | Temporary (up to 150 days) | | Section 232 | National security concerns | Product-specific | Can be long-term | | Section 301 | Unfair foreign trade practices | Country-specific | Can be long-term | The key distinction is that Section 122 is economic stabilization-focused, not enforcement-focused. ## Potential Impact on Importers and Supply Chains If implemented, an action could: Because it can be applied broadly, importers across multiple industries may be affected simultaneously.

• [PDF] TRADE ACT OF 1974 [Public Law 93–618, as amended ... - GovInfo

  of his determination, and (2) immediately convene the group of congressional official advisers designated under section 161(a) and consult with them as to the reasons for such determination. (c) Whenever the President determines that fundamental inter-national payments problems require special import measures to in-crease imports— VerDate Nov 24 2008 13:01 Feb 10, 2026 Jkt 000000 PO 00000 Frm 00014 Fmt 9001 Sfmt 9001 G:\COMP\90-99\TAO1.BEL HOLC February 10, 2026 G:\COMP\90-99\93-618.XML As Amended Through P.L. 119-75, Enacted February 3, 2026 15 Sec. 122 TRADE ACT OF 1974 (1) to deal with large and persistent United States bal-ance-of-trade surpluses, as determined on the basis of the cost- insurance-freight value of imports, as reported by the Bureau of the Census, or (2) to prevent [...] OF APPROPRIATIONS FOR GATT. There are authorized to be appropriated annually such sums as may be necessary for the payment by the United States of its share of the expenses of the Contracting Parties to the General Agree-ment on Tariffs and Trade. This authorization does not imply ap-proval or disapproval by the Congress of all articles of the General Agreement on Tariffs and Trade. ø19 U.S.C. 2131¿ SEC. 122. BALANCE-OF-PAYMENTS AUTHORITY. (a) Whenever fundamental international payments problems require special import measures to restrict imports— (1) to deal with large and serious United States balance- of-payments deficits, (2) to prevent an imminent and significant depreciation of the dollar in foreign exchange markets, or (3) to cooperate with other countries in correcting an [...] be made pursuant to the provisions of this Act reducing or eliminating the duty or other import restric-tion on any article if the President determines that such reduction or elimination would threaten to impair the national security. (b) While there is in effect with respect to any article any ac-tion taken under section 203 of this Act, or section 232 or 351 of the Trade Expansion Act of 1962 (19 U.S.C. 1862 or 1981), the President shall reserve such article from negotiations under this title (and from any action under section 122(c)) contemplating re-duction or elimination of— (A) any duty on such article, (B) any import restriction imposed under such section, or (C) any other import restriction, the removal of which will be likely to undermine the effect of the import restrictions

• What the Supreme Court's tariff ruling changes, and what it doesn't

  Undeterred, the president has now turned to another legal authority, Section 122 of the Trade Act of 1974 "(opens in a new window)"), which allows temporary across-the-board tariffs when the United States has “large and serious balance-of-payments deficits.” A few hours after the court’s decision, Trump announced across-the-board tariffs of 10 percent, and the next day boosted those to 15 percent—their maximum level. They expire after 150 days unless extended by Congress.

• IEEPA Tariffs Terminated, Replacement Section 122 Tariffs Take Effect

  ### Replacement Tariffs Take Effect Under Section 122 In another Proclamation issued February 20, the President imposed a new 10 percent tariff under Section 122 of the Trade Act of 1974 (“Section 122”). Section 122 authorizes the President to impose tariffs up to 15 percent to address “large and serious” U.S. balance-of-payments deficits, or to prevent an “imminent and significant” depreciation of the U.S. dollar. Such tariffs must generally be imposed on a non-discriminatory basis and for no more than 150 days, unless extended by Congress. Until now, Section 122 has never been used. Under the February 20 Proclamation, the new 10 percent tariff applies to products from all countries beginning 12:01 a.m. on February 24 for the full 150-day period (until July 24, 2026). [...] On February 20, the U.S. Supreme Court released its decision in Learning Resources, Inc. v. Trump, the case challenging the legality of the Trump Administration’s tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). By a 6-3 majority, the Court held that IEEPA does not authorize the President to impose tariffs. In the wake of this decision, President Trump issued a number of executive orders (“EOs”) and proclamations to terminate tariffs imposed under IEEPA, and to put in place replacement tariffs under Section 122 of the Trade Act of 1974. This alert summarizes these recent actions, considers additional tariff actions the Trump Administration is expected to roll out in the coming weeks, and addresses remaining uncertainties regarding the process for obtaining [...] #### Additional Tariff Actions Previewed By definition, the tariffs imposed by the Trump Administration under Section 122 are temporary, and the Administration has already announced plans to initiate additional trade actions in the coming weeks under other statutory authorities that authorize imposition of tariffs over a longer term. In particular, U.S. Trade Representative Jamieson Greer announced that his office will be initiating new investigations under Section 301 of the Trade Act of 1974 concerning major trading partners, which would proceed on an expedited basis.