How Section 122 Tariffs Could Benefit You

By Mikenna Richardson, International Trade & Tariff Advisor, Peacock Tariff Consulting

The past year has been a turbulent time for tariffs. Beginning in early 2025, many businesses saw their bottom lines balloon to unthinkable proportions due to new tariff charges from U.S. Customs. While a substantial number of charges are the result of the application of 232 tariffs, many organizations have been impacted by the re-use of the International Emergency Economic Powers Act of 1977 (IEEPA). In April 2026, the U.S. Supreme Court struck down the use of this act, ending those tariffs and granting refunds to businesses that paid the charges.

In response, the current administration implemented Section 122 of the Trade Act of 1974, which applies a 10% charge (tariff) on all products imported into the United States. While Section 122 seems like another bump in the road, it won’t last for long. The 1974 Trade Act stipulates that this section can only be enforced for 150 days, meaning that as of July 20, 2026, these extra charges will end. International trade is an ever-changing field; it is vital that businesses jump on this opportunity to secure their IEEPA refunds.

Tariffs are a hot topic. Instant communication allows the world to move much faster than it ever has before, allowing for trade deals to come out of nowhere and tariffs to be implemented in the blink of an eye. Most people aren’t following these international events closely enough, only noticing them when their bottom line begins to balloon. That is what happened for many businesses last year. As Section 122 was introduced, even more confusion arose. What section? Of what Act? How does this affect my business? Why is that bill so high now? Tariffs do not need to be scary or confusing; a better understanding of tariffs and their application provides clarity and builds business confidence faster than you may think.

What is Section 122?

Section 122 is a part of the Trade Act of 1974, an act introduced into the U.S. legal system designed to distinguish what powers the president had over international trade. It claimed to be, “an Act to promote the development of an open, nondiscriminatory, and fair world economic system, to stimulate fair and free competition between the United States and foreign nations, to foster the economic growth of, and full employment in, the United States, and for other purposes.” In other words, the act served as a structure to stabilize the U.S. trading relationship with the world. The act is comprised of numerous sections that offer the president broad powers in the case of an emergency—Section 122 is one of those sections.

Essentially, the provision allows the U.S. government to introduce a 15% tariff on goods brought into the country, but only if there is reasonable cause to do so. Limitations are laid out very clearly. It cannot be used unless there is a clear financial imbalance that cannot be remedied in any other way. The implementation of Section 122 is also at the discretion of the president and does not require congressional approval.

The IEEPA was used in February 2025 to implement tariffs on products imported into the U.S. This was done with the hopes that Americans would purchase more American-made products. Despite this, however, their buying habits continued to rely on incoming items. Prices rose, and people all over the world looked for ways to remedy the situation as their American buyers slowed their spending on increasingly expensive goods.

In May 2025, a case was brought before the U.S. Court of International Trade, and subsequently rose through the courts before reaching the Supreme Court. After deliberation, in February of 2026, the Supreme Court found that IEEPA did not grant the president the ability to apply tariffs.

The tariffs were removed and Section 122 was instated in its place. In addition, the Supreme Court ordered the U.S. Government to return the funds collected to those who paid tariffs levied under the IEEPA. Refunds had to be processed in a few stages to lessen the load on the government. The online refund portal opened on April 20, 2026.

What does this mean for business?

While the rollercoaster of trade news may be stressful, keeping a finger on the pulse of this situation is important for business who continue to trade in the U.S. This isn’t the first time in recent history that Canadian businesses have been affected by U.S. tariffs, and refunds provide a good opportunity to capitalize on, but time is of the essence.

We don’t know whether Section 122 will be overturned like IEEPA tariffs were. But it is important to look out for any indication that the process repeats. In the meantime, IEEPA refunds are being processed, and organizations that have been proactive are reaping the benefits of early refund filings.

If you have questions regarding your business’s refunds, their status, or are looking for help in filing for a refund, don’t delay. The trade world moves on fast—don’t get left behind.

Peacock Tariff Consulting (PTC) offers tailored trade compliance solutions through its flagship platform, TariffEdge, a generative AI-based solution developed in partnership with PRAKTIKAI. This innovative platform empowers SMEs to navigate complex tariff regulations with greater accuracy and efficiency, helping them stay ahead in a rapidly evolving global trade environment. Learn more at tariffedge.com. 

The views and information presented in this blog are those of the author and do not necessarily reflect the views of the Ontario Chamber of Commerce (OCC). While the OCC is pleased to share insights from its members, inclusion of this content does not constitute an endorsement or independent verification of the TariffEdge product or any claims related to it.