Here's what's actually happening, and what to do about it before it shows up on a supplement.

The Section 122 surcharge disappears July 24 — maybe

The Section 122 surcharge was imposed back in February after the Supreme Court struck down the administration's IEEPA-based tariffs. It applies to most imports, but it exempts goods already covered by Section 232 tariffs and goods that qualify under USMCA. Section 232 covers finished vehicles and certain powertrain parts — engines, transmissions, and related components. So the surcharge's expiration on July 24 mostly affects the parts that aren't swept up by those other programs.

That's a bigger category than it sounds. Roughly 44% of the OEM parts used in collision repair are manufactured outside the United States, according to PartsTrader. For non-USMCA parts coming from Japan, South Korea, and EU countries — think bumper covers, lamps, sensors, brackets, trim — the surcharge going away could mean a temporary cost reduction.

The catch is the word "temporary." The U.S. Trade Representative proposed a fresh round of Section 301 tariffs on June 2 covering 60 countries at rates of 10% to 12.5%, with auto parts explicitly named in scope, according to trade analysis of the proposal. Public hearings on that wrapped July 7–9. If those tariffs get finalized before July 24, the Section 122 expiration won't lower your costs at all — it'll just swap one tariff authority for another. Congress is considered unlikely to extend Section 122 past its 150-day statutory limit, so the expiration is the near-certain part. What replaces it is the open question.

USMCA Round 3 could redraw what counts as a "duty-free" part

The second deadline is bigger-picture but longer-fuse. The July 20 round of bilateral U.S.–Mexico talks follows the United States' decision not to renew USMCA in its current form at the agreement's mandatory six-year joint review on July 1.

The agreement isn't going away — USMCA remains in force during negotiations and doesn't expire until 2036. But U.S. negotiators are pushing to change the rules that decide which parts qualify for duty-free treatment. They've proposed raising the regional value content threshold for vehicles from 75% to 82%, and adding a new requirement that at least 50% of a vehicle's content originate specifically in the United States, according to reporting from The Globe and Mail. No U.S.-specific content threshold exists today. Canada, notably, hasn't been included in these bilateral rounds.

Why should a body shop care about content thresholds? Because body and chassis components are classified as core parts under the current rules of origin — they carry the same 75% regional value content threshold as engines and transmissions. Tighten that threshold, and more of the panels, structural parts, and modules you order every day could fall out of duty-free status and pick up a tariff. That change wouldn't hit this week's estimates, but it sets the direction for parts pricing over the next several years.

Why this lands harder on ADAS-heavy repairs

Tariff policy has been squeezing collision parts for more than a year, and the vehicles carrying the most exposure are exactly the ones filling calibration schedules. Modern ADAS-equipped vehicles are loaded with imported semiconductor content — radar modules, camera assemblies, and processing units — and collision repair's exposure to chip pricing has grown sharply as cars become rolling computers. S&P Global Mobility estimates North American vehicles now carry an average of $2,256 in electronic control units, with semiconductor content alone at $1,154 per vehicle.

Those aren't optional parts on a repair. When a sensor bracket, a radar module, or a windshield-mounted camera housing is part of the job, it's also part of the calibration — and every one of those components is sitting somewhere in this tariff picture. Calibrations already appeared on 35.6% of direct repair program estimates in the third quarter of 2025, up from 26.9% a year earlier, per CCC Intelligent Solutions. The parts that trigger calibration work are increasingly the parts most sensitive to what happens at the trade table.

What It Means for Your Shop

You can't control tariff policy, but you can keep it from eating your margin. A few practical moves for the next couple of weeks:

• Don't lock long quotes on imported parts right now. Prices could move in either direction after July 24. Where you can, quote parts close to order date rather than committing days ahead.
• Document parts-price changes on supplements. If a module or panel jumps because a new Section 301 rate took effect, note the cause and the date. That paper trail is what gets a supplement approved.
• Talk to your insurers proactively. The shops that come out ahead communicate cost pressure early instead of absorbing it silently. Reference the deadlines directly — adjusters are seeing the same headlines.
• Watch the ADAS parts specifically. Radar, camera, and sensor components are both the priciest line items and the ones that gate a calibration. A delayed or repriced sensor doesn't just raise the bill — it stalls the calibration and the delivery.

The calibration itself is the part you can control. When the module finally arrives, being able to complete the calibration in-house — instead of subletting and waiting again — is what protects your cycle time when parts pricing is already working against you.

Where This Leaves You

Nobody knows yet whether July 24 brings a small break on imported parts or just a new tariff wearing a different number. What's certain is that parts volatility isn't going anywhere, and it's concentrated on the electronics-heavy, ADAS-equipped vehicles that already dominate your schedule. The shops that stay calm through it are the ones that quote tight, document everything, and keep the calibration work in-house so a parts delay is the only delay.