The Sunset Clause Congress Wrote for Itself Did Its Job

The 150-Day Clock Section 122 Set for Itself

Section 122 lets a president impose a temporary, economy-wide import surcharge whenever the United States is running a "large and serious" balance-of-payments deficit. The statute caps the surcharge at 15 percent and the emergency at 150 days. It says exactly what happens next, too: the surcharge runs "for a period not exceeding 150 days (unless such period is extended by Act of Congress)."⁴ Extension was never automatic. It required a bill, a sponsor, a committee, and a vote, the same path any other tariff Congress has set has to travel.

The president invoked it on February 24, 2026, four days after the Supreme Court struck down the broader tariffs he had been imposing under the International Emergency Economic Powers Act and closed off that route.³ The White House proclamation cited "large and serious United States balance-of-payments deficits" and set the surcharge at 10 percent; within 48 hours it rose to the statutory ceiling of 15 percent.⁵ From that date, the clock the statute itself had set was running, and Congress could stop it only by acting.

1. Feb 20, 2026

   Supreme Court strikes down IEEPA tariffs, 6-3³

   The ruling closes the president's broader tariff authority and precedes Section 122's invocation by four days.

2. Feb 24, 2026

   Section 122 proclaimed, 10 percent rising to 15⁵

   The 150-day clock starts running.

3. Mar 11, 2026

   S.4049 introduced to repeal Section 122 outright⁶

   The first bill in Congress goes the opposite direction from extension.

4. Jul 22, 2026

   Wyden's Congressional Trade Powers Reform Act introduced²

   Two days before the deadline, a second bill asks Congress to reclaim tariff authority rather than extend the president's.

5. Jul 24, 2026, 12:01 a.m.

   Section 122 expires; Section 301 duties replace it⁷

   New Section 301 duties of 10 to 12.5 percent take effect on products from 80 countries the same minute, with no gap in coverage.

No extension bill was ever filed. The only two bills Congress produced on Section 122 in 2026 went the other way, one in March and one two days before the deadline, both asking to repeal the authority rather than prolong it.⁶² At 12:01 a.m. on July 24, 150 days after the proclamation, Section 122 expired on its own terms, and Section 301 duties took its place the same minute.⁷ The administration had prepared for the lapse it never asked Congress to prevent.

What the Ledger Shows, By Any Estimator

However the effective rate is measured, Section 122 pushed it to a level the country had not carried since the Second World War. The Yale Budget Lab put the average effective tariff rate at 11.0 percent in early April 2026, "the highest since 1943" excepting 2025 itself, before consumers had time to substitute away from the taxed goods. Accounting for substitution, the rate was 9.6 percent. Yale's own model made the counterfactual explicit: let Section 122 expire in 150 days as scheduled, and the rate falls to 8.2 percent, still the highest since 1946.⁸ That is the branch Congress chose.

Household cost estimates move with the rate, and they disagree with each other more than the rate data does, because each prices a different month of tariff policy against a different method.

None of the three is wrong on its own terms, and none of them is measuring the same tariff schedule. The gap between $900 and $2,500 is not a sign the number is unknowable. It is a record of how much the schedule moved in six months, from the pre-IEEPA tariffs, through the ruling, through Section 122 at its 15 percent ceiling. On any of the three estimates, the household paid more for keeping Section 122 in force than for letting it lapse.

The Power the Statute Never Delegated

Section 122's extension clause is not an accident of drafting. Congress wrote a statute that hands the president a tariff for 150 days and then takes it back unless Congress itself acts. That is the same allocation of power Article I makes. Tariffs belong to the legislature by default, and a president holds one on a lease Congress can decline to renew. The Supreme Court said the same thing in different words four days before Section 122 was even invoked, ruling 6-3 that the International Emergency Economic Powers Act does not authorize tariffs at all. Writing for the majority, Chief Justice Roberts reasoned that "if Congress intended to grant tariff authority under IEEPA, it would have done so expressly, as it consistently has in other tariff statutes."³

Section 122's own trigger, a "large and serious" payments deficit, was contested from the week of the proclamation. The current account does run a deficit, but the capital account runs a corresponding surplus. The balance of payments the statute's name refers to is the sum of both accounts, not the current account alone. Trade lawyers argued through the spring that the condition Section 122 was written for was never actually met.⁴ No court settled the question, because the 150-day clock ran out before one had to.

The Supply-Chain Case and the Leverage Case, in Their Own Terms

The strongest brief for keeping Section 122, or something like it, permanently in the president's hands does not come from USTR. AEI's Derek Scissors makes the supply-chain version in his own terms: "tariffs that focus on reshoring vital supply chains can boost American manufacturing to some extent and national security to a greater extent, at far less cost than we face now." He names the sectors that matter: semiconductors, critical minerals, and shipbuilding, plus the materials and components that feed them. His case is resilience, not near-term jobs. It rests on keeping one foreign supplier from working through third parties to compromise those chains.¹¹ The Conference Board's account of the July negotiations makes the second case, in the language trade negotiators actually used. Threat letters to 21 countries carried an August 1 deadline. That forced governments to choose between concessions now and a legal fight over tariffs whose survival was still uncertain, leveraging that uncertainty to extract concessions on a clock the president controlled.¹² Both arguments grant the household cost and say the country bought something with it a narrower tool could not have delivered in time.

Set beside those two, USTR's own account from July 2026 is the weaker version of the same case. "Manufacturing productivity surged and greenfield investments continue flowing into the United States, reversing prior multiyear manufacturing job decline trends," the agency wrote.¹³ It cites factory-construction jobs up more than 83,000 since the administration took office, and falling prices on staples including eggs, butter, and major appliances.¹³ That jobs case does not clear its own bar. Eighty-three thousand factory-construction jobs over the year and a half since the administration took office works out to under five thousand a month, a modest pace for the broadest tariff regime the country has run since the 1940s. It is also a narrower measure than manufacturing employment itself, which is what a reshoring claim actually has to move.¹³

Scissors's supply-chain case fares better, and this paper grants it: a genuine chokepoint input can justify a tariff faster than an investigation allows.¹¹ But Section 122 was never built for that case. It taxed all imports from every country at once, triggered by an economy-wide payments claim, not a finding about any specific input. Section 301 is the tool actually suited to a concentrated, security-relevant supply chain, targeted at named practices in named countries, and it replaced Section 122 the same minute Section 122 expired.⁷ The deadline pressure the Conference Board documents came from a broader, blanket authority, IEEPA first and then Section 122, that the courts and the statute's own clock have both now closed. It was never a tool built for one chokepoint, and its expiration leaves Section 301, 201, and 232 standing, the narrower tariffs Wyden's own bill keeps intact and asks Congress to review, not end.²¹² Letting Section 122 lapse did not give up the room to act fast that a real chokepoint would require. It retired the one instrument broad enough to tax a chokepoint and everything else at the same time.