U.S. Tariff Status Update
LATEST RULING & IMPLICATIONS
Moving into 2026, broadly applied duties, with increases on goods from several countries, including specific tariffs on products like wood, steel, and aluminum, were in place. On February 20, the Supreme Court struck down IEEPA (International Emergency Economic Powers Act) tariff authority, removing the legal basis for many tariffs, upending revenue. Many IEEPA-based tariffs collected in 2025 into early 2026 will likely be challenged for refunds. If courts require repayment, federal revenues could be materially reduced, and importers may seek substantial reimbursement.
The recent ruling limits the president’s broad, unilateral power to impose tariffs but does not eliminate the president’s ability to issue them. Instead, it requires the administration to utilize more structured approaches, such as Section 122 of the Trade Act of 1974. This section allows for import surcharges of up to 15 percent for a duration of up to 150 days. As a result, there will likely be increased congressional oversight over the imposition of tariffs. Market participants will closely monitor how treaty ratifications interact with the broader U.S. tariff framework and whether negotiation exemptions extend beyond temporary global duties.
Considerations Moving Forward
Legal Challenges
After the Supreme Court ruled that broad tariffs under the IEEPA were unlawful, President Trump issued an order for a 15 percent tariff on nearly all imports under Section 122, an authority that allows the president to impose tariffs for up to 150 days without direct congressional approval.
Tariff Revenue and Refund Battles
The Supreme Court’s ruling on the invalidation of IEEPA tariffs has led importers and business groups to advocate for refunds of an estimated $150+ billion in tariffs that were collected. While the Court did not explicitly mandate refunds, it addressed the legality of the tariffs, leaving it to lower courts to handle the refund claims. This process is expected to take several years before it is resolved.
Immediate Impact
The administration has changed tack and is substituting one tariff regime for another (Section 122), meaning tariffs may stay elevated in the near term.
Moving Forward
The Supreme Court ruling does not indicate an immediate decrease in tariffs; however, it marks an important shift in the authority over trade policymaking. While some uncertainty persists in the short term, this decision may lead to a more organized trade environment in the U.S., providing organizations with a clearer perspective for future business planning.
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