Administration unveils immediate, temporary 10% levy

Within hours of a Supreme Court opinion that narrowed one emergency route for sweeping duties, the White House issued an executive order using Section 122 of the Trade Act to apply a temporary, across‑the‑board 10% surcharge to incoming goods. The move reflects a deliberate pivot by the administration after the Court, in a 6–3 decision, curtailed use of the International Emergency Economic Powers Act (IEEPA) as the basis for broad import levies.

Unlike the emergency theory the Court constrained, Section 122 contains an explicit statutory limit: measures taken under it lapse after 150 days unless Congress votes to extend or replace them. Administration officials described the surcharge as a short-term bridge to preserve negotiating leverage while other, narrower authorities are advanced.

Officials also said the new order is additive rather than a substitute: duties already levied under Section 232 (national‑security based) and ongoing Section 301 measures remain in force where they apply, meaning many imports will face combined, higher effective rates. The White House signaled fresh, targeted Section 301 inquiries that could produce further product‑ or partner‑specific tariffs on top of the 10% surcharge.

The fiscal backdrop complicates any unwinding. Treasury and Customs officials warned during court proceedings that collections tied to the earlier emergency program swelled monthly receipts to roughly $30 billion, with fiscal‑year‑to‑date customs receipts near $124 billion. Independent estimates cited in market commentary put cumulative exposure in the high tens to low hundreds of billions (commonly cited near $199 billion), and one projection flagged the unlikely but consequential possibility of collections reaching roughly $1 trillion by midyear if the program continued—facts that make wholesale refunds politically and operationally fraught.

Operationally, Customs and Border Protection will need to issue enforcement guidance quickly; trade lawyers say implementation questions — who qualifies for refunds, what documentation is required, and the retroactivity window — will dominate the next phase of litigation and agency rulemaking. Large importers with detailed duty records are positioned to press for recovery through administrative claims; smaller firms face disproportionate cash‑flow and surety pressures.

Markets and corporate procurement teams reacted almost immediately. Equities for import‑exposed retailers and marketplaces were repriced as traders absorbed the court's narrowing of one authority, then adjusted again when the Section 122 surcharge was announced. Importers scrambled to front‑load shipments, document payments to preserve potential recovery paths, or accelerate supplier diversification—moves that advantage larger firms with working capital and logistics flexibility.

Supply‑chain effects are likely to be uneven and persistent. Firms that reroute sourcing to Southeast Asia — beneficiaries during the tariff episode such as Vietnam and Thailand — may see some relief, while small U.S. importers and low‑margin retailers bear immediate cost pressure. The administration’s approach appears designed to keep short‑term leverage at the negotiating table while it develops narrower, legally tenable instruments.

Politically and legally, the action sets up a two‑track fight: the White House is expected to pursue narrower administrative measures and targeted investigations while urging Congress to craft clearer, longer‑term authority. Expect vigorous congressional oversight, litigation focused on implementation and remedies, and agency rulemaking that will together determine how much of the elevated effective rates persist beyond the statutory 150‑day window.

In short: the 10% Section 122 surcharge is a rapid policy response intended to preserve leverage and revenue while the administration adapts to the Supreme Court’s constraints — a development that will keep markets, customs officials, businesses and lawmakers actively recalibrating in the weeks and months ahead.