The July 24 Tariff Deadline: What It Means for New Car and EV Prices

Quick answer: (Updated July 25, 2026) Section 122's 10% global surcharge expired on schedule at its 150-day limit early on July 24, 2026. It didn't lapse into a gap — USTR finalized the separate forced-labor Section 301 tariffs that same day, so most affected imports moved to a 10% or 12.5% rate (varies by country) rather than falling back to pre-tariff levels. The investigation that specifically names automobiles and batteries — the "structural excess capacity" probe covering 16 economies — still has not produced a rate. Analysts now expect that determination well after July 24, with some suggesting it may not land until after the November midterms. That means a precise vehicle-price forecast still isn't possible — but here's everything that is confirmed as of today.

By Morgan Ellis, Editor at GearUp Insights

Update — July 25, 2026: USTR took final action on the forced-labor Section 301 investigation on July 23, imposing tariffs of 10% or 12.5% (a reduced 10-12.5% net-of-MFN rate applies to the EU, Taiwan, Japan, Korea, and Switzerland) on 60 economies effective July 24 — the same day Section 122 expired. The separate excess-capacity investigation covering automobiles and batteries specifically has not produced a rate. See "What's Changed Since July 12" below for what actually affects vehicle pricing right now.

What's Actually Expiring on July 24

On February 20, 2026, the U.S. Supreme Court struck down the tariffs the Trump administration had imposed under the International Emergency Economic Powers Act (IEEPA). That same day, the administration invoked Section 122 of the Trade Act of 1974 instead — a flat 10% global import surcharge that took effect February 24. Section 122 caps both the rate (15%) and the duration (150 days), and the president cannot extend it without Congress. That clock runs out on July 24, 2026.

The tariff's legal footing is already shakier than a simple expiration date suggests. A coalition of 24 states, along with two private importers, challenged Section 122 in court, arguing the administration hadn't shown the specific type of "balance-of-payments deficits" the statute requires. On May 7, 2026, the U.S. Court of International Trade agreed, ruling 2-1 that the tariff exceeded the president's statutory authority. The court's relief was narrow — it applied only to the three plaintiffs with legal standing to sue (the state of Washington, acting as an importer, plus Burlap and Barrel, Inc. and Basic Fun, Inc.); the other 23 states were dismissed for lack of standing. The government appealed immediately, and on May 12 the Court of Appeals for the Federal Circuit put the ruling on hold pending that appeal. Practically, that means Section 122 duties are still being collected from every importer except those three plaintiffs while the case works through appeal — but the tariff's underlying legal authority is now genuinely in dispute, independent of whatever replaces it after July 24.

Anticipating the expiration either way, USTR opened two separate Section 301 investigations in March, designed to rebuild a tariff structure that doesn't depend on IEEPA or an expiring 150-day statute. Section 301 doesn't carry Section 122's rate cap or duration limit, though actions taken under it are still subject to periodic statutory review rather than running indefinitely without any check.

What's Already Been Proposed — and What Hasn't

Of the two investigations, one has produced a concrete proposal. On June 2, 2026, USTR determined that 60 economies — together accounting for roughly 99.4% of U.S. import value — had failed to adequately prohibit or enforce bans on goods made with forced labor. As a remedy, USTR proposed a two-tier tariff: roughly 15 economies (including the EU, Canada, Mexico, Taiwan, and the UK), depending on how the EU is counted and how listed trade commitments are classified, would face an additional 10% duty for having at least a partial forced-labor import prohibition or a relevant trade-agreement commitment, while the remaining economies without any such framework would face 12.5%. The proposal also includes product-level exclusions — agricultural goods, aviation parts, industrial inputs, minerals, and pharmaceuticals among them — so the 99.4% figure describes how much of U.S. import value comes from the covered economies, not a guarantee that every product from those economies gets taxed.

Feature	Section 122 (expiring)	Section 301 forced-labor track (proposed)
Rate structure	Flat 10% on most imports	Two-tier: 10% or 12.5%, based on each country's forced-labor enforcement, with product exclusions
Legal basis	Trade Act of 1974, Section 122	Trade Act of 1974, Section 301
Duration cap	150 days (expires July 24, 2026)	No 150-day cap, but subject to periodic statutory review
Status as of July 25, 2026	Expired at its 150-day statutory limit on July 24; no longer collected	Finalized July 23; in effect since July 24 — 10% or 12.5% by country, with a reduced net-of-MFN rate for the EU, Taiwan, Japan, Korea, and Switzerland

USTR made that final determination on July 23, 2026. Per the USTR press release, the rates are: 10% for 17 named economies (including Canada, India, Indonesia, Malaysia, and Mexico) that have a forced-labor import prohibition, a relevant trade-agreement commitment, or a partial enforcement regime; a reduced rate net of each product's MFN duty for the EU, Taiwan, Japan, Korea, and Switzerland; and 12.5% for every other investigated economy. USTR also carved out exemptions for raw materials without adequate domestic supply, goods that risk economy-wide disruption, and products tied to specific forced-labor-related commitments. These rates took effect July 24 — the same day Section 122 expired — so there was no gap in tariff coverage.

The Investigation That Actually Targets Cars and Batteries

Here's the part that matters most if you're specifically thinking about a vehicle purchase: the forced-labor tariffs above are broad-based across product categories generally. But USTR opened a second investigation in March — into "structural excess capacity" in 16 economies (China, the EU, Japan, South Korea, Mexico, India, Vietnam, Taiwan, and others) — that explicitly lists automobiles and batteries among the sectors it's examining, alongside steel, aluminum, semiconductors, and machinery.

That investigation held its public hearings in early May. As of this writing (July 12), it has not produced a proposed tariff rate for any sector, automotive or otherwise. USTR has said it's aiming for an accelerated timeline tied to the July 24 deadline, but it hasn't invoked any formal expedited procedure, and recent reporting suggests a determination is expected "in the coming months" rather than imminently. In practical terms, this is the single biggest open question for anyone tracking how tariffs might move new car or EV prices in the second half of 2026 — and it's still unanswered.

What's Already Locked In vs. What's Still Pending

It's easy to lump all of this together, but a meaningful chunk of the tariff exposure on vehicles has nothing to do with the July 24 deadline at all. Those tariffs were set under separate legal authority and aren't going anywhere regardless of how the Section 301 investigations resolve.

Tariff or investigation	Status as of July 25, 2026	Connected to the July 24 deadline?
Section 232 tariffs on imported automobiles and certain auto parts	Already in effect; rates vary by country and trade arrangement	No — separate national-security authority
Section 232 tariffs on steel and aluminum products	Already in effect; coverage varies by product and country	No — separate national-security authority
Existing Section 301 tariff on China-made EVs (100%)	Already in effect under the 2024 China tariff action	No — predates the 2026 investigations
Existing Section 301 tariff on Chinese lithium-ion EV batteries (25%)	Already in effect under the 2024 China tariff action	No
Section 301 forced-labor tariff (10%/12.5%)	Finalized July 23; in effect since July 24, with exclusions for select raw materials and disruption-risk products	Yes — directly replaced Section 122 with no coverage gap
Section 301 excess-capacity investigation (autos/batteries, 16 economies)	Investigation still ongoing; no rate identified as of July 25	Missed the July 24 target; analysts now expect it later in 2026, possibly not until after the midterms

The practical upshot: if you're buying a Chinese-brand EV, the steep tariffs already baked into that math aren't changing because of this deadline. If you're considering a vehicle assembled in South Korea, Japan, Europe, or Mexico, exposure can't be judged from the assembly country alone — automakers source batteries, cells, electronics, and steel across multiple countries, and whether trade-agreement provisions like USMCA carve out any exemption under this new Section 301 action specifically (as opposed to under Section 122) hasn't been clearly established. Don't assume a component is automatically exempt just because a similar product was exempt under the old tariff.

For the fuller picture of how tariffs, interest rates, and gas prices are already showing up in sticker prices this year, see our breakdown of why cars cost more in 2026.

What's Still Uncertain

A few things worth sitting with before drawing conclusions:

The forced-labor rates are proposed, not final. USTR can still adjust them based on the comments and hearing testimony it just received, and the president retains final say on both rate and country coverage.

Duties could stack. A new Section 301 duty may be added on top of existing normal customs duties, Section 232 tariffs, or earlier Section 301 tariffs on the same product. Whether it actually does depends on the product's tariff classification, country of origin, and any specific anti-stacking guidance in the final rule.

A temporary gap is possible, but existing tariffs wouldn't disappear. If no new Section 301 action is in effect when Section 122 hits its 150-day limit, the additional 10% Section 122 charge could lapse. Section 232 tariffs and the existing China-specific Section 301 tariffs would remain regardless.

The legal fight over Section 122 is unresolved. The CIT's May 7 ruling against the tariff is on hold pending appeal to the Federal Circuit, with possible Supreme Court review after that — a process that will likely run well past July 24.

Given all of that, any specific dollar figure on how much a given vehicle's price might move is, right now, a guess dressed up as a forecast. We'd rather tell you that plainly than manufacture false precision.

What Drivers Should Actually Do

If you're not currently shopping for a car, there's genuinely nothing to act on here — this is a policy story to watch, not an emergency. If you are in the market over the next couple of months:

Note the vehicle's country of assembly and battery sourcing, not just the brand's headquarters. Tariff exposure follows where the car and its components are actually made.

Don't panic-buy based on rumor. Tariff changes typically hit importers and manufacturers first; how much (if any) gets passed through to sticker prices, and how fast, varies by automaker and model.

Watch for a Federal Register notice around July 24, not a news headline. USTR's actual determination — including exemptions, effective dates, and any grace period — matters more than early coverage of it.

If timing is flexible, weigh waiting against what's on the table today. A few more weeks could bring clarity on the excess-capacity investigation, but current inventory discounts, financing incentives, and tax-credit eligibility can also change in that window. A confirmed deal today isn't automatically worse than an uncertain tariff outcome later.

Tariffs aren't the only global economic swing hitting driver costs this year — oil prices moved just as fast a few months ago. For a look at how that played out and what it means if it happens again, see our breakdown of a $100-oil scenario.

We'll follow up once USTR publishes findings on the automobile and battery-specific investigation, since that's the piece that actually answers the question most drivers are asking.

Our Take

Trade policy has a talent for making a fairly simple question — "will my next car cost more?" — take four government dockets, a federal court ruling, and three acronyms to (not) answer. As of July 25, half of that question has an answer: the forced-labor tariffs are final and in effect, and Section 122 is gone without a coverage gap. But the half that actually determines whether cars and batteries specifically get more expensive — the excess-capacity investigation — missed its own July 24 target. We'd rather tell you that plainly than manufacture a deadline that didn't hold. We'll update this page again once USTR actually publishes a rate on autos and batteries.

Sources

U.S. Supreme Court — Learning Resources, Inc. v. Trump, No. 24-1287 (decided February 20, 2026; holding that IEEPA does not authorize the President to impose tariffs)
Congressional Research Service — Supreme Court Rules Against Tariffs Imposed Under IEEPA (plain-language summary of the ruling and what it left standing)
USTR — "USTR Takes Action in Forced Labor Section 301 Investigations" (July 23, 2026)
Office of the U.S. Trade Representative — press releases on the Section 301 forced-labor and structural excess capacity investigations
U.S. Court of International Trade, State of Oregon v. United States and Burlap and Barrel, Inc. v. United States, Slip Op. 26-47 (May 7, 2026)
U.S. Court of Appeals for the Federal Circuit, administrative stay order in the consolidated Section 122 appeals (May 12, 2026)
Federal Register, "Notice of Determinations and Request for Comments Concerning Actions in Section 301 Investigations... Forced Labor" (June 5, 2026)