Matcha Section 122 Import Duty 2026: The Complete US Importer's Guide

The Section 122 import surcharge of February 2026 reshaped U.S. tariff planning, but it never applied to matcha. After the Supreme Court held on February 20, 2026 that IEEPA does not authorize tariffs, the administration imposed a temporary 10% global surcharge under Section 122 of the Trade Act of 1974, in force from February 24 to July 24, 2026. Every tea subheading in HTS heading 0902 was on the proclamation's Annex II exclusion list, so matcha entries paid no surcharge. The surcharge expired on July 24, 2026 and was replaced the same day by Section 301 duties that also exclude tea. Unflavored matcha enters the U.S. under HTS 0902.10.90 or 0902.20.90 at a Free general rate; only flavored green tea carries a base duty. Importers whose landed-cost models still add a 10% surcharge or a 6.4% base duty to plain matcha are overstating their cost.

This guide is the 2026 Section 122 duty reference for US-based matcha importers — café chains, D2C brands, food manufacturers, and supplement companies sourcing matcha from Japan or any other origin. It covers the legal framework behind the surcharge, the HS codes and exclusions that matter for tea, the calculation methodology, the documentation required for accurate filing, the cost levers importers still control, and the policy outlook as of September 2026.

Key takeaways for Section 122 duty on matcha

• Effective dates: February 24 to July 24, 2026 (the 150-day statutory limit), following the February 20, 2026 Supreme Court ruling on IEEPA-based tariffs. Congress did not extend it.
• Rate: 10% ad valorem on customs value (transaction value, which excludes international freight and insurance).
• Applicable HS codes: None for tea. Every heading 0902 subheading (0902.10, 0902.20, 0902.30, 0902.40) was on the Annex II exclusion list. Bulk matcha typically falls under 0902.20.
• Combined rate: Unflavored matcha (0902.10.90 / 0902.20.90) is Free; flavored green tea is 6.4%, or 3.2% for qualifying Japanese goods. No surcharge applied on top.
• Cost impact: None from Section 122. Matcha landed cost is driven by product price, freight, insurance, the Merchandise Processing Fee, the Harbor Maintenance Fee on ocean entries, and broker fees.
• Strategic response: Remove any surcharge line from U.S. COGS models; confirm classification on every entry; watch Federal Register notices that could change tea's Section 301 exclusion.

Table of contents

1. Background: Section 122 and matcha
2. The legal framework
3. HS codes and the Section 122 tea exclusion
4. Duty calculation methodology
5. Documentation and filing
6. Strategic responses for importers
7. Policy outlook 2027 and beyond
8. FAQ

1. Background: Section 122 and matcha

Understanding the 2026 duty environment requires understanding the history that led to it.

2025: IEEPA-based tariff regime

Beginning in 2025, the administration used International Emergency Economic Powers Act (IEEPA) authority to impose broad import tariffs across multiple categories, including agricultural products. Matcha imports from Japan paid the reciprocal tariff during 2025 (10% from April, later 15% inclusive of MFN duty under the U.S.-Japan framework) until an executive order removed coffee, tea, and other agricultural products from the reciprocal tariff effective November 13, 2025.

February 2026: Supreme Court ruling

On February 20, 2026, the Supreme Court held in Learning Resources, Inc. v. Trump that IEEPA does not authorize the President to impose tariffs. An executive order signed the same day ended the IEEPA duties, and CBP stopped collecting them on February 24, 2026.

February 2026: Section 122 introduction

Within days of the Supreme Court ruling, the administration announced replacement duties under Section 122 of the Trade Act of 1974, which provides for "balance of payments authority" to impose import surcharges. Unlike IEEPA, Section 122 expressly authorizes import surcharges, but the surcharge was still challenged: the Court of International Trade held the proclamation invalid on May 7, 2026, with relief limited to the plaintiffs in that case, and the Federal Circuit stayed that ruling pending appeal on June 11, 2026, so collection continued until the surcharge expired.

The replacement Section 122 duty: 10% ad valorem on customs value from February 24 to July 24, 2026, applied globally with product exclusions listed in Annex II of the proclamation. Annex II excluded certain agricultural products, including every green tea and black tea subheading in heading 0902, so matcha paid no Section 122 surcharge on top of its base rate (Free for unflavored green tea, 6.4% for flavored).

2. The legal framework

Section 122 authority

• Statute: Trade Act of 1974, Section 122.
• Purpose: Allows the President to impose temporary import surcharges "to deal with large and serious United States balance-of-payments deficits."
• Maximum rate: 15% under the statute. The 2026 rate of 10% was below the cap.
• Maximum duration: 150 days, unless extended by Act of Congress. Congress did not extend it, and the surcharge expired on July 24, 2026.

Practical consequences for matcha

• Universal application with product exclusions: Applied to all countries of origin, not specific to Japan, but goods classified in Annex II subheadings were excluded whatever their origin. Chinese-origin and other-origin green tea powders were excluded on the same basis.
• Exclusion by classification, not certification: Every green tea subheading was excluded, so JAS Organic, USDA Organic, and conventional matcha were all outside the surcharge. Certification played no role either way.
• No stacking for matcha: Unflavored matcha (0902.10.90 / 0902.20.90) kept its Free general rate with no surcharge; flavored green tea kept only its base rate.
• Currency: Customs value is converted to USD using the exchange rate for the date of exportation.

Distinction from previous regimes

3. HS codes and the Section 122 tea exclusion

For general matcha HS classification, duty rates and rulings outside Section 122, see the matcha HS code guide — that page is the owner of classification basics.

What matters here is that every tea classification was on the Section 122 exclusion list, and the same subheadings are excluded from the Section 301 duties that replaced it. For matcha and related green tea products:

Matcha-specific classification considerations

• Powder vs leaf: Both classified under 0902 as green tea; the "powder" form does not change classification.
• Stone-milled vs jet-milled: Same HS code regardless of milling method.
• Origin: HS classification is the same for Japan-origin, China-origin, or any other origin.
• Organic status: Tracked by a 10-digit statistical suffix (for example, 0902.20.90.15 certified organic vs 0902.20.90.50 other), not a separate rate line; both were excluded from Section 122.

Mis-classification risks

• Classifying matcha under a non-tea HS code (e.g., food preparation): Misclassification; carries higher duty risk if discovered, including back duties and penalties.
• Splitting shipments to claim small-package classification: May or may not be acceptable depending on shipment structure; consult customs broker.
• Failing to disclose "contains tea" in composite products: Composite products (matcha-cocoa blend, matcha-protein powder) may be classified outside heading 0902, where the tea exclusions and the Free rate do not automatically apply.

4. Duty calculation methodology

Step-by-step duty calculation

For a representative shipment: 100 kg unflavored latte-grade matcha at USD 75/kg FOB Japan, shipped by air.

Comparison: pre-2026 vs 2026

• Before November 13, 2025: Japanese matcha also paid the IEEPA reciprocal tariff (10% from April 2025, later 15% inclusive of MFN duty) on customs value.
• November 13, 2025 onward: Tea was excluded from the IEEPA tariff, then from Section 122 (February 24 to July 24, 2026), and now from Section 301. The shipment above carries no duty throughout, only the MPF and broker fee.
• Annualized impact at 1,200 kg/year: None from Section 122. A model that adds a 10% surcharge and a 6.4% base duty to unflavored matcha overstates duty by 16.4% of customs value on every entry.

Calculation considerations

• Customs value basis: Ad valorem duties and the MPF are calculated on transaction value, which excludes international freight and insurance (19 U.S.C. 1401a). Freight and insurance raise landed cost but not duty.
• Air vs ocean freight tradeoff: Lower ocean freight reduces landed cost directly; it does not change duty, and ocean entries add the HMF. For lower-grade matcha where reefer ocean is acceptable, the freight saving is meaningful.
• Insurance: Standard 1% of FOB+freight is typical; some importers insure at lower rates, which reduces landed cost.
• Currency: Customs value is converted to USD at the exchange rate for the date of exportation. A weaker yen lowers the USD value of yen-denominated invoices.

5. Documentation and filing

Section 122 surcharges were filed through the same customs entry system as base duties, and the Section 301 duties that replaced them are filed the same way. Required documentation for a matcha entry:

At customs entry

• CBP Form 3461 (Entry/Immediate Delivery)
• CBP Form 7501 (Entry Summary) — declares the HTS classification and duty owed, including any Chapter 99 lines
• Commercial invoice with HS code declaration
• Packing list
• Bill of Lading or Airway Bill
• FDA Prior Notice confirmation

Filing responsibility

• Importer of Record: Legally responsible for accurate duty declaration and payment.
• Customs broker: Typically files on behalf of the importer. Broker liable for filing accuracy but importer liable for final payment.
• Self-filing: Some larger importers self-file using ACE (Automated Commercial Environment) — requires CBP filer code and trained personnel.

Recordkeeping

• Customs entry records: 5 years from date of entry
• Commercial invoices and supporting documentation: 5 years
• FSVP records: 2 years (separate retention requirement)
• Duty payment records: 5 years

6. Strategic responses for importers

Section 122 added no duty to matcha, but importers have four main strategic responses to any landed-cost increase, whether from a future tariff action that reaches tea, a freight spike, or a supplier price change.

Response 1: Absorb the cost (no action)

• Approach: Accept a landed cost increase as a non-pass-through cost; absorb in margin.
• When this works: Brands with strong gross margin headroom; products where pricing is sticky and pass-through risks customer churn.
• When this fails: Mid-margin operators where 10% landed cost increase materially erodes profitability.

Response 2: Pass through to retail pricing

• Approach: Adjust retail pricing to offset increased landed cost.
• Math: A retail product with 50% gross margin requires roughly a 5% retail price increase to fully offset a 10% landed cost increase (since cost is half of revenue).
• When this works: Premium-positioned products where modest price increases are absorbed by customer base.
• When this fails: Mass-market or price-sensitive products where 5% price increase causes meaningful demand decline.

Response 3: Reduce landed cost through Incoterms / freight optimization

• Switch from CIF to FOB: Manage your own freight to reduce freight markup; lower freight means lower landed cost, though duty is unchanged because freight is not part of U.S. customs value.
• Switch from air to reefer ocean (where grade allows): Reefer sea freight at USD 1.50–2.50/kg vs air at USD 5–12/kg significantly reduces landed cost; the saving is in freight alone, since duty is assessed on transaction value.
• Consolidated freight via freight forwarder: For mid-size shipments, consolidated air freight can reduce per-kg freight cost by 15–20%.
• When this works: Importers with established freight relationships and grades that tolerate ocean transit (culinary and below).

Response 4: Switch to DDP arrangements with Japanese supplier

• Approach: Negotiate Delivered Duty Paid (DDP) with the Japanese supplier — supplier handles freight, customs clearance, and duty payment on behalf of buyer.
• How it works: Supplier becomes Importer of Record; manages duty and fee payment internally; bills buyer at all-in DDP rate.
• Advantages: Eliminates customs filing complexity; predictable per-kg cost; supplier may absorb some currency or duty risk.
• Disadvantages: DDP rate typically includes 10–15% premium over FOB-to-buyer-managed; FSVP responsibility unchanged for the buyer.
• When this works: Smaller importers without established customs broker relationships; importers prioritizing simplicity over cost optimization.

Combined strategy

When a cost increase does hit, importers can combine responses — for example, pass through 50% of the increase to retail pricing, absorb 25%, and recover 25% through freight or Incoterms optimization. The combined approach spreads the impact without single-lever overreliance.

7. Policy outlook 2027 and beyond

Section 122 duration

• Statutory cap: 150 days unless extended by Act of Congress. The surcharge ran from February 24 to July 24, 2026 and was not extended.
• Litigation: The Court of International Trade held the proclamation invalid on May 7, 2026 for the plaintiffs in that case, and the Federal Circuit stayed that ruling pending appeal on June 11, 2026. The outcome does not affect matcha entries, which were excluded.
• Replacement regime: Section 301 duties took effect on July 24, 2026 on goods of the investigated economies at 10% or 12.5%, depending on the economy (for Japan, 12.5% inclusive of MFN duty). As of September 2026, tea is excluded under Annex II, Part A of that action, which covers goods of any investigated economy.

Trade negotiation outcomes

• Bilateral U.S.-Japan terms: The 3.2% special rate for qualifying Japanese flavored green tea remains in the tariff schedule; unflavored matcha is already Free.
• Exclusion risk: Tea's exclusion from the Section 301 duties rests on the Annex II list in the USTR notice; any change to that list would come through a later Federal Register notice.
• Timeline: Track notices that modify the Section 301 annexes for changes to heading 0902 rather than planning around a negotiation calendar.

Importer planning recommendations

• Plan budgets at the rate for your classification. Free for unflavored matcha (0902.10.90 / 0902.20.90); 6.4%, or 3.2% for qualifying Japanese goods, for flavored green tea; plus the MPF, and the HMF on ocean entries.
• Diversify origin mix. Section 122 excluded tea regardless of origin, and the Section 301 tea exclusion applies to every investigated economy. Origin diversity still protects against country-specific tariff changes.
• Document duty paid on every entry. If a surcharge was applied to an excluded tea entry, entry records support a correction, protest, or refund request.
• Monitor administration announcements. Trade policy shifts can happen quickly; importers benefit from attention to USTR and CBP announcements.

Plan U.S. matcha landed cost with First Agri. DDP arrangements available for first-time US importers; FOB pricing for established importers preferring duty management; freight optimization advice for grade-appropriate shipping mode selection.

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FAQ

What is the US Section 122 import duty on matcha?

None. Section 122 was a temporary 10% surcharge on customs value that ran from February 24 to July 24, 2026, and every tea subheading in HTS heading 0902 was on its Annex II exclusion list. Unflavored matcha is Free under 0902.10.90 or 0902.20.90; flavored green tea carries 6.4%, or 3.2% for qualifying Japanese goods.

When did Section 122 duty take effect?

February 24, 2026, four days after the Supreme Court ruled that IEEPA does not authorize tariffs. It expired on July 24, 2026 and was replaced the same day by Section 301 duties, which also exclude tea.

Does Section 122 duty apply to organic matcha?

No. Organic and conventional matcha were both excluded, because the exclusion followed the HTS 0902 classification. JAS Organic, USDA Organic, or EU Organic certification made no difference either way.

Does Section 122 duty apply to matcha from China?

No. The Annex II exclusion applied to all tea classified in heading 0902 regardless of country of origin, so Chinese-origin green tea powder and matcha were excluded on the same basis as Japanese-origin product. Any China-specific duties are separate from Section 122.

Can DDP arrangements with my Japanese supplier eliminate Section 122 duty?

There is no Section 122 duty on matcha to eliminate. In general, DDP does not remove a duty; the supplier becomes responsible for paying it and bundles the cost into the all-in per-kg price, so the duty is still paid, just by a different party in the chain.

How long did Section 122 duty remain in effect?

It has ended. The surcharge reached its 150-day statutory limit on July 24, 2026 and Congress did not extend it. The Federal Circuit stayed the trade court's ruling against it pending appeal in June 2026, but the case never affected matcha, which was excluded.

Related reading

• How to Import Matcha from Japan: 2026 FDA, EU, GCC Regulatory Deep Dive
• How to Buy Matcha Wholesale from Japan: Step-by-Step Guide for First-Time Importers
• Matcha Wholesale 2026: The Complete B2B Buyer's Guide to Sourcing from Japan
• FDA Requirements for Importing Matcha to the US: A Complete Compliance Guide
• Bulk Matcha Buying Guide 2026: MOQ Tiers, Shipping & TCO for B2B Buyers
• Matcha Wholesale Negotiations 2026: The Tight-Supply B2B Playbook

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