Section 122 Tariffs: What manufacturers should be planning for now 

The tariff landscape shifted materially in February — and it remains unsettled. 

After the U.S. Supreme Court ruled the IEEPA tariffs illegal, the Trump administration moved quickly to restore tariff authority using Section 122 of the Trade Act of 1974. While that step reestablished a measure of continuity, it also introduced new uncertainty around duration, rates and what comes next. 

Section 122 tariffs are now in effect, with increases already signaled and an expiration timeline that effectively forces another policy shift later this summer. At the same time, additional Section 301 actions are being discussed, creating a compressed planning window for manufacturers reassessing costs, pricing and supply chain exposure. 

For manufacturing leaders, the key challenge isn’t understanding the legal mechanics behind these changes. It’s deciding how to operate in an environment where tariff policy is moving quickly, clarity is limited and the cost impact is real. 

This article outlines where Section 122 stands today, what to expect as July approaches and what manufacturers should be doing now to prepare — including how to think about refund opportunities tied to now‑invalidated IEEPA tariffs. 

Where Section 122 fits in the current tariff landscape 

Section 122 gives the president authority to impose temporary tariffs to address balance‑of‑payments concerns. Unlike other trade actions, it is explicitly time‑limited — capped at 150 days unless extended by Congress. 

In this case, Section 122 has been positioned as a stopgap following the invalidation of IEEPA tariffs. It restores tariff coverage quickly, but it does not provide long‑term certainty. Current rates began at 10%, with an increase to 15% widely expected, and the statute’s expiration date effectively forces another pivot later this summer. 

Just as important, Section 122 is not occurring in isolation. Signals from the administration suggest an acceleration of Section 301 actions as Section 122 sunsets. For manufacturers already exposed to multiple tariff authorities, there is a real risk that tariff layers could stack over a short period of time. 

That combination — rising rates, limited duration and overlapping authorities — is what makes the current moment uniquely challenging. 

What this means for manufacturers right now 

For most manufacturers, the immediate concern isn’t legal theory. It’s cost, timing and visibility. 

A shift from a 10% tariff to 15% may sound incremental, but in capital‑intensive or low‑margin manufacturing environments, that change can materially affect margins, quoting strategies and customer pricing discussions. 

Equally important, this is not a “one‑and‑done” tariff event. Section 122 appears to be a temporary bridge, not a destination. As it sunsets in late July, manufacturers should assume that tariff policy will change again — potentially quickly. 

The companies that struggle most in these environments tend to be those waiting for certainty before acting. The organizations managing this best are not predicting policy outcomes; they are modeling multiple scenarios and identifying where cost structures, sourcing decisions and contract terms need flexibility. 

What manufacturers are seeing on the ground 

Across the manufacturing sector, a few consistent themes are emerging. 

First, many companies are discovering that their actual tariff exposure doesn’t match their assumptions. Indirect importers often lack clarity around where tariffs are embedded in supplier pricing or whether suppliers properly passed through IEEPA tariffs that may now be refundable. 

Second, pricing conversations are becoming more difficult — not just because of higher costs, but because customers are pushing for explanations and evidence. Manufacturers are being asked to justify increases tied to tariff changes that may themselves be temporary. 

Third, procurement and supply chain teams are under pressure to move faster. Alternative sourcing options that once seemed theoretical are now being evaluated in real time, often without the luxury of clean data or stable policy assumptions. 

These are not abstract issues. They are operational challenges requiring near‑term decisions. 

Refund opportunities from invalidated IEEPA tariffs 

One area that deserves attention is refunds tied to IEEPA tariffs that were later ruled illegal. 

Companies that paid IEEPA tariffs directly may be able to pursue refunds through formal claims. For indirect importers, the situation is more complex. Refund recovery often depends on supplier cooperation, documentation and proof that tariffs were charged and retained. 

Manufacturers should not assume refunds will automatically flow back through the supply chain. In many cases, recovery requires proactive outreach, clear documentation requests and internal coordination across tax, procurement and finance teams. 

Even where refunds are uncertain, understanding potential exposure is important. It can inform pricing discussions and help manufacturers avoid overreacting to cost increases that may ultimately be temporary. 

Planning in a compressed window 

The biggest risk right now is not making the “wrong” forecast about tariff policy. It’s failing to plan at all. 

With Section 122 likely to expire in late July and Section 301 actions potentially accelerating, manufacturers are operating in a compressed window in which multiple decisions may need to be made quickly. That includes: 

• Identifying where tariff exposure is concentrated by product, supplier or geography 
• Reviewing contract terms to understand who bears tariff risk 
• Modeling margin sensitivity across multiple tariff scenarios 
• Improving internal communication so pricing, sales and finance teams are aligned 

The goal is not to predict how policy will unfold. It’s to reduce surprises and shorten reaction time when it does. 

Looking ahead 

The current tariff environment is changing quickly and many manufacturers are operating with limited clarity. Section 122 has restored tariff authority, but it has not resolved uncertainty — it has simply shifted it. 

Manufacturers that approach this moment with better information, clearer assumptions and scenario‑based planning will be better positioned to respond as policies continue to evolve. Those waiting for stability may find that the next change arrives before they’re ready. 

In environments like this, resilience comes not from certainty, but from preparation.