24/02/2026
U.S. Supreme Court Strikes Down IEEPA Tariffs and Trump Responds with Additional Duty
In a 6â3 decision issued on 20 February, the U.S. Supreme Court struck down President Trumpâs tariffs imposed under the International Emergency Economic Powers Act (IEEPA). In the case of imports from Chinese Mainland and Hong Kong, this includes the reciprocal tariff of 10 percent and the fentanylârelated additional tariff also of 10 percent (the tariffs imposed pursuant to Section 301 and Section 232 remain in place). The case will now return to the U.S. Court of International Trade (CIT), which will have to decide the appropriate remedy, including whether and how refunds should be processed.
The majority opinion framed the main question in this case as whether the statutory provision allowing the president to âregulate importationâ under IEEPA includes the authority to impose tariffs. Reviewing the statutory context, the court emphasised that IEEPA has historically been used to restrict transactions â such as freezing assets or banning certain imports and exports â rather than adjusting tariff rates. It also noted that Congress has enacted numerous trade statutes that grant tariffâsetting authority in explicit, limited circumstances, suggesting that IEEPA was never intended to serve as a broad tariff power. The court also found that reading IEEPA to authorise unlimited tariffs would upset the balance of congressional control over foreign commerce.
Moreover, the court rejected the governmentâs argument that emergencies justify expanding presidential authority in this context. Although IEEPA gives the president flexibility when responding to extraordinary threats, the court held that it does not override clear structural limits on tariff authority. Because nothing in the statutory text suggested that Congress intended to delegate such sweeping power, the court concluded that the presidentâs tariff proclamations exceeded his statutory authority. As such, the court declined to address whether the tariffs also violated the nonâdelegation doctrine. Accordingly, the majority held that IEEPA does not authorise the tariffs imposed by President Trump, effectively invalidating all executive orders imposing tariffs under IEEPA.
Several justices filed separate opinions. Justice Gorsuch concurred, emphasising his agreement with the majorityâs conclusion that IEEPA does not authorise presidential tariffâsetting but criticising other members of the court for not applying the major questions doctrine with full force to the IEEPA tariffs. Justice Kagan, joined by justices Sotomayor and Jackson, also concurred, reasoning that the court could strike down the tariffs without relying on the major questions doctrine at all. Jackson also concurred separately, noting her preference to use legislative history to interpret IEEPA.
Justice Kavanaugh, joined by justices Thomas and Alito, dissented. Kavanaugh said he would have upheld the tariffs because he believed IEEPAâs plain language, together with the historical precedent of tariffs imposed under IEEPAâs predecessor statute, provided the president the authority to impose tariffs. Notably, Kavanaugh also explained that the majorityâs decision âmight not substantially constrain a Presidentâs ability to order tariffs going forwardâ because ânumerous other federal statutes authorize the President to impose tariffs and might justify most (if not all) of the tariffs at issue in this case â albeit perhaps with a few additional procedural steps that IEEPA, as an emergency statute, does not require.â Such statutes include the Trade Expansion Act of 1962 (Section 232), the Trade Act of 1974 (sections 122, 201 and 301) and the Tariff Act of 1930 (Section 338).
The case will now return to the U.S. Court of Appeals for the Federal Circuit (CAFC) and then to the CIT. The CAFC had already partly vacated the CITâs decision because it had erroneously issued a universal injunction. Now the CIT will have to decide the appropriate remedy for the nowâinvalidated tariffs, including whether and how refunds should be processed.
In response to the Supreme Court decision, Trump issued a presidential proclamation on 20 February imposing a 10 percent global tariff under Section 122 of the Trade Act of 1974, a dormant provision in U.S. trade law that had never been used before, and on 21 February he declared that the tariff rate would be raised to its maximum 15 percent level. This statute allows the president to impose a temporary import surcharge of up to 15 percent ad valorem, temporary quotas, or both, on imported merchandise for balanceâofâpayment (BOP) reasons. Specifically, imports may be restricted to (i) deal with large and serious U.S. BOP deficits; (ii) prevent an imminent and significant depreciation of the dollar in foreign exchange markets; or (iii) coâoperate with other countries in correcting an international BOP disequilibrium. Measures may be imposed for a period of up to 150 days, unless extended by an act of Congress. The current tariff is slated to be in place through 23 July.
The proclamation exempts from the Section 122 tariff a range of agricultural and food products, certain critical minerals, metals used in currency and bullion, energy and energy products, natural resources and fertilizers, pharmaceuticals and pharmaceutical ingredients, certain electronics, various motor vehicles, certain aerospace products, information materials, as well as certain other articles and most HS Chapter 98 items (the pertinent lists are available here and here). Goods subject to Section 232 tariffs will continue to face those tariffs in lieu of the Section 122 tariff, with the caveat that, like the nullified reciprocal tariff, the new Section 122 tariff will apply to the nonâsteel, nonâaluminium or nonâcopper content of Section 232âtargeted steel and aluminium products and derivatives and copper products. Whatâs more, the new Section 122 tariff will not apply to goods entered under the United StatesâMexic0âCanada Agreement or the Dominican RepublicâCentral AmericaâUnited States Free Trade Agreement (CAFTAâDR).
The Trump administration has also announced its intention to take the following actions âin short orderâ.
Initiate New Section 301 Investigations. The administration intends to initiate several investigations under Section 301 of the Trade Act of 1974 to deal with unjustifiable, unreasonable, discriminatory and burdensome acts, policies and practices by many U.S. trading partners. These investigations are expected to cover most major trading partners and to address areas of concern such as industrial excess capacity, forced labour, pharmaceutical pricing practices, discrimination against U.S. technology companies and digital goods and services, digital services taxes, ocean pollution and practices related to the trade in seafood, rice and other products. The administration intends to conduct these investigations on an âaccelerated timeframeâ.
Continue On-going Section 301 Investigations. The administration intends to continue on-going Section 301 investigations, including those involving Chinese Mainland and Brazil. USTR indicates that if these investigations conclude that there are unfair trading practices and that responsive action is warranted, âtariffs are one tool that may be imposed.â
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Continue On-going Section 232 Investigations. The administration intends to maintain the tariffs currently imposed under Section 232 of the Trade Expansion Act of 1962 and to conclude its on-going Section 232 investigations.
