Section 122 Is Gone. FLIP 301 Took Its Place: The China Duty Stack Now
The 10% Section 122 surcharge expired July 24, 2026. The same minute, a new Section 301 forced-labor duty took effect: +12.5% on China, +10% on Malaysia. It stacks on existing Section 301 duties.
Section 122's 10% global surcharge ran for its full 150 days and ended at 12:01 a.m. eastern time on July 24, 2026, without a congressional extension. At that same minute, CBP began collecting a new layer: Section 301 duties on 60 economies that USTR found had failed to impose or enforce a ban on forced-labor imports. Industry calls it "FLIP 301."
For Chinese goods it is higher than the surcharge it replaced. And unlike Section 122, it stacks on top of the existing Section 301 China duties.
What changed on July 24
- Section 122 (HTSUS 9903.03.01, +10%) expired. It no longer applies to entries on or after July 24, 2026.
- FLIP 301 took effect under CBP CSMS #69326983:
- China: 9903.05.31, +12.5%
- Hong Kong: 9903.05.43, +12.5%
- Malaysia: 9903.05.54, +10%
- Vietnam: 9903.05.84, +12.5%
- Cambodia: 9903.05.28, +10%
- The transit exemption (9903.05.85) only covered cargo loaded and moving before July 24 and entered before July 28. That window has closed.
The China duty stack, before and after
| Layer | Feb 24 – Jul 23, 2026 | From Jul 24, 2026 |
|---|---|---|
| Base duty (MFN) | Per HTS line | Per HTS line (unchanged) |
| Section 301 China list | List 1–4 rate | List 1–4 rate (unchanged) |
| Section 122 (9903.03.01) | +10% | Expired |
| FLIP 301 (9903.05.31) | — | +12.5% |
| Section 232 goods | 232 applies; 122 exempt | 232 applies; FLIP exempt (9903.05.90) |
Key rules:
- FLIP is additive. U.S. note 52(a) keeps other Chapter 99 duties in place, so the List 3 duty (9903.88.03) is still owed.
- Section 232 goods are exempt from FLIP. For steel, aluminum and copper items and listed derivatives, file 9903.05.90 instead. Never stack both.
- Wood is exempt only when covered by the specific 9903.76 wood-program headings. Ordinary wood articles are not automatically exempt.
- Antidumping and countervailing duties, MPF and HMF all apply as before.
Common mistakes we're seeing
- Reading the exemption attachment as a general exemption. Codes such as 3926.90.99, 9405.11 and 8302.10 appear under 9903.05.88, which covers civil aircraft only. Commercial shipments of those goods still pay FLIP 301.
- Dropping the Section 301 list duty on the assumption that FLIP replaced it. It didn't, and both are owed.
- Keeping Section 122 in landed-cost models. Remove the 10% for entries on or after July 24, 2026.
FLIP isn't China-only
Because FLIP covers 60 economies, moving production to Southeast Asia no longer avoids an extra layer. Malaysia and Cambodia pay +10%, and Vietnam +12.5%. Re-run landed costs on those sourcing plans as well.
What about Section 122 refunds?
That is a separate question. The Court of International Trade held Section 122 unlawful in May 2026, but the Federal Circuit stayed that ruling, and there is no general refund mechanism yet. Keep your February–July 2026 entry records in case one opens.
Want us to re-check the duty stack on your next China or Southeast Asia shipment? Send us the HTS code and origin.
Sources: CBP CSMS #69326983 (July 23, 2026); USTR Final Action notice (July 23, 2026); Proclamation 11012, 91 FR 9339.