The Court Struck Down the Tariffs. The Administration Rebuilt Them the Same Day.
On 20 February 2026, the Supreme Court ruled 6-3 that the legal instrument underpinning the largest American tariff regime since the 1930s was unlawful. Within hours, the administration imposed new tariffs under a different statute. The question is no longer whether these tariffs are legal. It is whether any stable legal architecture for them exists at all.
What the Court Actually Said
Chief Justice Roberts, writing for six justices, was precise: IEEPA does not authorise the President to impose tariffs. The taxing power — of which tariffs are unambiguously a part — belongs to Congress. It always has. The administration had used IEEPA to construct a tariff regime of historic scale, on the legal theory that “regulate importation” encompasses the power to tax imports. The Court found those two words cannot bear that weight.
The ruling struck down the full IEEPA tariff structure — the reciprocal tariffs, the fentanyl-framed tariffs on Canada, Mexico and China, and the so-called Liberation Day regime. More than $160 billion in duties collected since January 2025 are now, in principle, subject to refund. The administration has signalled it intends to contest that process in court.
The Immediate Response
The administration did not pause. On the same day the ruling was issued, President Trump announced a 10% universal import surcharge under Section 122 of the Trade Act of 1974 — a statute designed for balance-of-payments emergencies, with a statutory ceiling of 15% and a hard expiry of 150 days. By the following day, the surcharge had been raised to 15%. It takes effect February 24 and expires July 24, 2026, unless Congress votes to extend it.
Simultaneously, the US Trade Representative initiated Section 301 investigations into sixteen economies including China, the European Union, Japan, India, and Vietnam. Section 301 is the same authority used to impose the 2018 China tariffs — tariffs that survived legal challenge and remain in force today. Unlike Section 122, Section 301 tariffs carry no statutory time limit and no rate ceiling.
The 150-day clock on Section 122 is not a grace period. It is the deadline by which the administration must either obtain congressional authorisation or have Section 301 investigations advanced enough to replace what expires.
What Remains Unresolved
Whether Section 122 actually applies here is contested. The Peterson Institute has noted that the statute addresses balance-of-payments deficits — a specific technical condition distinct from the trade deficits the administration has characterised as an emergency. The administration’s own lawyers argued in the IEEPA case that Section 122 was not a substitute for IEEPA precisely because the two address different conditions. They are now using it as a substitute.
The Section 301 investigations are the administration’s real long-term instrument. Each investigation, if it concludes with a finding of unfair trade practice, opens the door to targeted tariffs with no expiry. The sixteen economies under investigation represent the majority of US goods imports. The investigations are expected to conclude in late 2026 — after the Section 122 regime expires, but before the 2026 midterms.
The tariff level has not materially changed. The legal foundation has been replaced twice in fourteen months. That instability is now a structural condition — not a transitional one.
Every capital allocation decision, every supply chain restructuring, and every trade negotiation conducted with the United States is now priced against a policy framework with no settled legal basis. Section 122 expires in July. Section 301 investigations may or may not produce durable authority in time. Congress has shown no appetite to legislate. The Court has now drawn a clear line on executive tariff power. What sits between that line and the administration’s objectives is unresolved — and the resolution, whatever form it takes, will define the structure of US trade policy for a generation.