What it is:
Section 122 of the Trade Act of 1974 authorizes the President to impose temporary import surcharges of up to 15 percent or quotas for no more than 150 days when the United States faces fundamental international payments problems, such as a serious balance-of-payments deficit or rapid dollar depreciation. It was enacted after President Nixon used the Trading with the Enemy Act (TWEA) to impose a temporary 10 percent import surcharge in 1971. Section 122 thus represents Congress's effort to codify a narrower, time-limited version of that emergency tariff authority, intending it as a short-term tool to stabilize the dollar, not as a long-term protectionist policy.

What changed:
Section 122 has never been invoked. Its logic reflected the fixed-exchange-rate era, but once the United States moved to floating exchange rates in 1973, the need for balance-of-payments tariffs largely vanished. Since then, monetary and fiscal policy, not trade restrictions, have been the preferred instruments for managing external imbalances. Still, Section 122 remains a dormant but legally available option for short-term, across-the-board surcharges without findings of unfair trade or national-security threats.

How it works now:
If a severe payment imbalance or dollar instability arises, the President may declare an emergency and impose temporary, broadly applied surcharges or import limits. The measures must generally be applied on a non-discriminatory basis to maintain the existing distribution of trade, although the President may exempt specific countries. 

These measures expire automatically after 150 days unless Congress extends them, and no prior investigation or consultation is required, allowing for rapid executive action in a financial crisis. That justification, however, is legally possible yet economically debatable, meaning any modern use of Section 122 would likely rest on a broad interpretation of the statute’s intent regarding a "balance-of-payments" crisis rather than the circumstances originally envisioned by Congress.

Implications for international exporters:
If the Supreme Court overturns the use of the International Emergency Economic Powers Act (IEEPA) for tariff actions next year, the administration could turn to Section 122 as a temporary stopgap, imposing 15 percent tariffs across nearly all imports for up to 150 days. Whether this would be a legally valid use of the provision remains to be seen, as Section 122 was designed for balance-of-payments emergencies rather than broad economic leverage.

Should Section 122 ever be invoked, exporters could face short-term tariff surges applied broadly across product categories, raising costs and complicating supply-chain planning even in the absence of any unfair-trade findings.