Section 122
After a Supreme Court Loss, a New Tariff Appears
On February 20, the Supreme Court delivered a major ruling on U.S. trade policy, finding that the administration could not rely on emergency-powers law to impose sweeping global tariffs because Congress had never clearly granted that authority.
Within hours of that decision, the White House announced a new approach: a 10% tariff applied broadly to imports from around the world, described as a replacement for the duties the Court had just invalidated.
This time, the administration pointed to a different legal foundation—Section 122 of the Trade Act of 1974, a little-used provision that allows temporary import restrictions in response to serious international payments problems.
At first glance, the move may look like a simple legal pivot. But Section 122 is not a general-purpose tariff tool. It was written for a very specific kind of economic moment, and it comes with limits that are easy to miss in the headlines and difficult to ignore in practice.
To understand what this new tariff can—and cannot—do, it helps to look at why Congress created Section 122 in the first place.
A Little-Known Law From a Different Economic Era
Section 122 is not a modern trade weapon. It is a holdover from the economic turmoil of the early 1970s, when the United States was grappling with a collapsing international monetary system, a weakening dollar, and fears that money was flowing out of the country faster than it could be replaced.
Congress wrote the law for that moment. The goal was to give the president a way to slow imports temporarily—not to reset trade relationships, not to protect favored industries, and not to impose a standing global tariff—but to create breathing room while lawmakers decided how to respond to a financial imbalance.
That history matters, because the statute was intentionally designed with limits that force the policy back into Congress’s hands. To understand what can happen next, you have to look closely at those limits.
What Is Section 122?
Section 122 of the Trade Act of 1974 is not a commonly used statute, and it was not written for modern trade disputes. It was created for a very specific kind of economic emergency.
Understanding what it actually does—and what it does not do—helps clarify both the limits of this authority and the role Congress still plays.
Section 122 Was Designed for a Currency Crisis, Not a Trade Strategy
Section 122 allows the president to temporarily restrict imports if the United States is facing:
“Large and serious United States balance-of-payments deficits.”
That phrase comes from the economic problems of the early 1970s, when the dollar was under heavy pressure, the global monetary system was breaking down after the end of Bretton Woods, and policymakers feared a rapid outflow of capital that could destabilize the U.S. economy.
Congress wanted to give the president a short-term emergency tool to slow imports and stabilize the dollar while lawmakers decided on a longer-term response.
It was not meant to restructure global trade or protect particular industries. It was meant to buy time during a financial shock.
What the Law Actually Allows
If a president invokes Section 122, the law permits:
A tariff of up to 15% on imports, or
Temporary limits on how much can be imported.
The key word is temporary.
Section 122 is one of the few trade authorities that was deliberately written with a built-in expiration date.
The 150-Day Limit Is Not Optional
Actions taken under Section 122 can last no more than 150 days—unless Congress votes to continue them.
That means:
The president can act quickly,
But cannot maintain the policy alone,
Congress must decide whether it continues.
This structure reflects the Constitution’s assignment of tariff power to Congress. Lawmakers delegated emergency authority—but kept a tight leash on it.
Many modern trade tools allow tariffs to stay in place for years. Section 122 does not. It forces the issue back to Congress within months.
How This Differs From Other Tariff Laws People Have Heard About
Most recent tariff actions have relied on different statutes, such as:
Section 301 (unfair trade practices),
Section 232 (national security),
Section 201 safeguards (import surges harming industries).
Those laws focus on specific problems and can remain in place for long periods.
Section 122 is broader in scope but far shorter in duration. It is closer to an economic emergency brake than to a traditional trade enforcement tool.
What Congress Can Do If It Disagrees
Because Section 122 authority expires automatically, Congress does not need an elaborate process to stop it. The statute already gives lawmakers several options.
Take No Action
If Congress does nothing, the tariffs end when the 150-day window closes.
Vote Against Extension
Any continuation requires congressional approval. Lawmakers can simply refuse to grant it.
Pass Clarifying Legislation
Congress can pass a law narrowing how Section 122 may be used or stating that the required economic conditions are not met.
Reassert Its Tariff Authority More Broadly
Since tariffs are constitutionally a legislative power, Congress can rewrite or reclaim delegated trade authorities if it believes they are being stretched beyond their purpose.
Why This Debate Is Less About Trade—and More About Process
Section 122 is rarely discussed today precisely because it was built for a different era. The United States now operates under floating exchange rates and global capital markets that function very differently from the 1970s system the law was designed to address.
Using it raises practical questions:
Does today’s situation match the type of balance-of-payments crisis Congress had in mind?
Should an emergency stabilization tool be used for an ongoing trade policy?
How much of its delegated authority does Congress want to reclaim?
Those are policy choices, not legal mysteries. The statute intentionally leaves the final decision with Congress.
The Bottom Line
Section 122 does allow a president to impose a broad, temporary tariff.
But it does not allow that tariff to become permanent without Congress.
The law was written as a stopgap measure—meant to steady the system briefly while elected representatives decide what comes next.
That decision point is not years away.
It arrives in about five months.