Will Section 122 tariffs expire by August 2026 without a permanent replacement tariff regime enacted?

Section 122 expiry is legally automatic at 150 days. The real question is whether Congress enacts replacement legislation within ~5 months. Major trade legislation historically takes 6-18 months. While the administration escalated from 10% to 15% within 24 hours showing urgency, the legislative process is inherently slower. The Black Swan Beacon's 15-25% probability of permanent >20% tariff legislation is relevant but captures a higher threshold; replacement at 10%+ has somewhat higher probability but still faces congressional procedural hurdles. Congressional action at 10%+ broad-based level within this timeframe has roughly 35-40% probability.

The SCOTUS ruling created a political crisis for the administration's signature trade policy. The administration used Section 122 within days, demonstrating extreme urgency. Congress has bipartisan protectionist sentiment, and the 150-day deadline creates a 'must-pass' urgency that can overcome typical congressional inertia. Historical precedent shows Congress can act quickly on trade when politically motivated. The administration will pressure Congress intensely as the July deadline approaches. The 'transformed, not reduced' characterization suggests the policy apparatus will find ways to maintain tariffs. Higher probability of replacement legislation than base case suggests.

Balancing legislative timeline against political will: Congress has approximately 5 months. Even with bipartisan protectionist sentiment, the specific design of replacement tariffs would be contentious — rates, exemptions, covered goods, trade partner differentiation all require negotiation. The administration might find partial executive alternatives (Section 301, Section 232) but these are more targeted, not 'broad-based' per resolution criteria. Most likely scenario: Congress is unable to pass comprehensive replacement by July 2026 but may be working on it. For strict resolution criteria requiring no enacted broad-based 10%+ legislation, I lean toward YES but with significant uncertainty.

Congressional dysfunction is the strongest signal. Passing major trade legislation in 5 months is extremely difficult regardless of political will. The Senate filibuster makes fast comprehensive tariff legislation unlikely without reconciliation, which has strict budget rules. While some tariff provisions could go through reconciliation, procedural complexity is significant. The base rate for major legislation passing within 5 months of a triggering event is low — probably 20-30%. Even adjusting upward for strong executive pressure and bipartisan sentiment, I put the probability of replacement legislation at 35-40%.

The resolution criteria are specific: no new federal legislation establishing broad-based import tariff rates at 10%+. Executive actions like Section 301 or 232 are not 'legislation.' Congress is slow — even popular measures face procedural delays. The 150-day clock started late February, meaning Congress needs to act by late July. That's one session with recesses, other legislative priorities, and inevitable horse-trading. However, the administration won't let tariffs disappear without a fight and will push Congress hard.

The SCOTUS ruling was a genuine political earthquake for trade policy. This creates exceptional legislative urgency with precedents for fast congressional action on trade when geopolitical urgency exists. Current environment — China rivalry, reshoring momentum — provides such urgency. The Black Swan Beacon put permanent >20% tariffs at 15-25%, but the bar here is lower (10%+). Adjusting for the lower threshold, I estimate 40-45% probability of replacement legislation, leading to a YES probability of 55-60%.

Section 122 expires automatically at 150-day limit. Congressional base rate for major legislation in 5 months is low (~25-30%). Strong political motivation pushes probability of replacement up to maybe 35-40%, but procedural hurdles (filibuster, committee process, conference) make comprehensive tariff legislation within the timeframe difficult.

Two forces in tension: congressional dysfunction (favors YES) versus strong bipartisan protectionist sentiment and executive pressure (favors NO). The 150-day deadline creates urgency but also a compressed timeline. Most likely outcome: Congress starts working on replacement but doesn't finish before expiry, resulting in a temporary gap in broad tariff authority.

Administration escalated from 10% to 15% in 24 hours, showing intensity of commitment to tariff policy. They will push Congress hard. But legislative process has minimum timelines — committee hearings, markup, floor debate, conference, signing. Even fast-tracked, 5 months is tight for comprehensive tariff legislation. Slight lean toward YES but this is genuinely uncertain.