Section 122 and UK to USA shipping in 2026

IEEPA Supreme Court Ruling

On February 20th 2026 the Supreme Court of the United States ruled that the White House use of IEEPA to introduce targeted tariffs was illegal and must be removed immediately. The vote carried 6:3 and has significant impacts on world trade moving forward.

As a direct response to the ruling the White House introduced a new set of Tariffs this time under Section 122 of the Trade Act. For shorthand from here on well refer to this simply as Section 122.

Section 122 came into effect on February 24th at 12noon EST and runs for a maximum of 150 days. That takes us to noon on July 24th.

Under the terms of Section 122, the White House can apply up to 15% tariffs on goods – however at the time of writing the global rate has only been set to a standard 10%. As Section 122 can only run until July 2026 a new framework will need to be introduced by then and we wait eagerly for news on that.

IEEPA vs Section 122

For many of us not much has changed, though in some instances the reduction in duties may be huge. Below ill be referring back to many of the terms clarified in the last post – so if you’re a bit lost get back over there and catch up.

If under IEEPA you were importing goods made outside of the EU or UK using a courier then Section 122 is a windfall.

Before Feb 20th 2026 you would have been paying for the goods plus the shipping as usual.

Liberation day introduced us all to our IEEPA Rates – some as high as 50%.

The Executive Order in July removed the $800 De Minimis so suddenly you had MFN Rates to pay on all the goods coming in on top of the IEEPA rates.

As you were using a courier to pay your duties and to handle the parcel chances are you were paying significant fees to them as well.

Your calculation may have looked like this under IEEPA…

Origin	Method	Goods	Shipping	MFN	IEEPA	Handling	Total
Made in China	Shipped via Fedex/UPS/DHL	$1000	$100	$160	$440	$30	$1730
Made in UK	Shipped via Fedex/UPS/DHL	$1000	$100	$160	$110	$30	$1400
Made in UK	Shipped via Royal Mail	$1000	$140		$100	$0.75	$1240.75
Made in EU	Shipped via Fedex/UPS/DHL	$1000	$100		$150	$30	$1280

Now under Section 122 its more like this…

Origin	Method	Goods	Shipping	MFN	Section 122	Handling	Total
Made in China	Shipped via Fedex/UPS/DHL	$1000	$100	$160	$110	$30	$1400
Made in UK	Shipped via Fedex/UPS/DHL	$1000	$100	$160	$110	$30	$1400
Made in UK	Shipped via Royal Mail	$1000	$140		$100	$0.75	$1240.75
Made in EU	Shipped via Fedex/UPS/DHL	$1000	$100	$160	$110	$30	$1400

Looking at each of these in a little more detail….

Made in China & Shipped via Fedex

Under IEEPA China had some wild and changeable tariffs – 34% up to 80% back to 15% – it was all over the place. I’ve used a 40% calculation here purely to clarify it was high for most of IEEPA. I am also picking on China – IEEPA treated much of Asia in the same way. Timing was everything. Under Section 122 goods made in China are treated in the same was as goods made in the EU or UK so that rate drops right down and saves significantly in those supply chains.

Made in UK and shipped via Fedex

The UK negotiated a 10% IEEPA rate – which on paper sounded good, but as any shipments sent in via the courier networks was also liable to pay the MFN Rate – the UK duties actually soared up and on pullovers fell closer to 30% once you add in all the fees and handling

Made in UK and shipped via Royal Mail

Back in July the Executive Order opened up a simplified route for goods arriving via the International Postal Network (An Post, Royal Mail etc). Under this framework only the IEEPA Rate would apply as long as goods were worth less than $800 and the duties were pre paid. No MFN Rates. For the UK that’s 10% duty plus handling! Royal Mail charges only a nominal fee for handling and as duties are pre paid by the shipper they are not having to lay out huge sums in duty on account so none of those costs have to be passed on.

Made in EU and shipped via Fedex

In 2025 a trade agreement was reached between the EU and USA to cap duties at 15%. Pretty unique. This only applied to goods made in the EU – not goods passing through from countries with higher IEEPA rates like China or India.

Duty on Shipping

It should be noted that duty is only charged on the portion of shipping that gets the goods to the USA, not on the shipping within the USA. So if you are paying someone $100 to get a box from Dublin to New York – you’ll have duty applied to some of the shipping not all of it. Usually this is worked out behind the scenes by the courier – but it does throw up some odd results on invoicing from time to time. Duty is not charged on the International Postal Network so there is a slight saving using this method.

Whats Next?

We will keep our eyes peeled between now and July 2026 when Section 122 is due to end. The tariff may go up to 15% so will respond to that if it happens. There are trade deals to be done. IEEPA was intended to crack down on the perception that low cost goods were getting into the US and destabilising the economy. That view hasn’t changed, but under Section 122 the main offenders here seem to be getting a better deal than expected and maybe that will be corrected.

 

Tell me about refunds!

IEEPA has been found to be illegal and by implication then the tariffs collected under that framework need to be returned. How that will work is unclear and may be a long road ahead. In our own case we have paid duties on all shipments into the US since August 2025 and will continue to do so through 2026. We work hard to mitigate these costs for you and will seek any refunds available if that opportunity arises.

Thank You

We’ll continue to monitor the situation and will keep this page updated as and when there are any changes. Do let us know if you have any questions at all by emailing info@billbaber.com – we have learnt a lot over the last year and are happy to share any and all knowledge!