Temporary United States (U.S.) Import Surcharge Under Section 122 of the Trade Act

On February 20, 2026, U.S. President Donald Trump issued a Presidential Proclamation imposing a temporary import surcharge under Section 122 of theTrade Act of 1974. The Proclamation was published in the Federal Register on February 25, 2026 and is available at: www.govinfo.gov/content/pkg/FR-2026-02-25/pdf/2026-03824.pdf

TemporarySurcharge

The Presidential Proclamation imposes atemporary 10% ad-valorem import surchargeon goods entering the United States, effective February 24, 2026. The surcharge applies in addition to Most Favoured Nation rates (ordinary Customs duties)and other applicable import charges.

Section 122 authorises thatthe US President may impose a surcharge of up to 15% ad-valorem. Thecurrent Proclamation applies a 10% rate. The U.S. President has publicly indicated that the rate may be increased within the 15% statutory ceiling, subject to further action.

The surcharge is imposed for a period of up to 150 days from February 24, 2026. Under the Trade Act, any extension beyond 150 days would require Congressional action.

Scopeand Application

The surcharge applies broadly to imported goods unless specifically excluded in the Presidential Proclamation and Annexes I and II. Key exclusions include:

1. Allarticles and parts of articles currently or that at a later stage becomesubject to import restrictions under Section 232 of the Trade Expansion Act of1962.
2. Certainstrategic or critical products expressly listed in Annexes I and II, includingspecified energy products, critical minerals, pharmaceuticals, electronics,vehicles, aerospace products, agricultural goods, and other identified tarifflines.
3. Goodsentered free of duty under specified trade agreements, where listed.
4. Goods loaded and in transit to the UnitedStates before February 24, 2026 subject to U.S. Customs requirements.

Membersexporting to the United States should assess the immediate commercial impact ofthe 10% surcharge on landed cost and pricing. The surcharge increases theduty payable at entry and will directly affect U.S. importers. Depending oncontractual terms, U.S. buyers may seek price adjustments or cost sharing tooffset the higher duty burden.

Companiesexporting to U.S. should therefore review contractual provisions on tariff adjustment and change in law and engage U.S. customers early on cost allocation or repricing discussions where necessary. Further updates will be issued shouldthe U.S. Administration revise the rate or scope of the surcharge within the 150-dayperiod.

Inlight of heightened global trade volatility and rising geopolitical tensions,FMM is organising a webinar titled U.S.Tariff Measures and Middle East Conflict: Implications for Malaysian Exporters on March 19, 2026. The sessionwill provide members with a practical assessment of the latest U.S. tariff developments and the commercial implications of the Middle East conflict,covering duty cost exposure, delivery disruption, payment risk, sanctions screening and insurance coverage.

Membersare encouraged to participate in this webinar. For further details, please refer to the attached brochure https://www.fmm.org.my/Events/Details/f4903028-a8b5-4dba-ba5e-025c8610aece?returnUrl=%2fEvents%3ftype%3du%26page%3d2