In a stunning 48-hour sequence of events that has sent shockwaves through global markets, diplomatic circles, and supply chains, President Donald Trump first announced a sweeping 10% global tariff on all countries — then raised it to 15% the very next day. The trigger: a landmark 6-3 Supreme Court ruling that struck down his previous emergency tariffs as unconstitutional, handing Trump the most significant legal defeat of his second term on his single most signature economic policy.

This blog breaks down the full story: what happened, the legal authority behind the new tariffs, how they differ from what came before, who gets hit hardest, what economists and markets are saying, and what it all means for global trade, American consumers, and the international economic order.

1. The Supreme Court Ruling That Changed Everything

On February 20, 2026, the United States Supreme Court delivered a 6-3 ruling in the consolidated case Learning Resources, Inc. v. Trump — affirming an earlier appeals court decision that President Trump had exceeded his authority when imposing sweeping global tariffs under the International Emergency Economic Powers Act (IEEPA).

What the Court Decided

• The Supreme Court ruled that IEEPA — a 1977 law designed for sanctions and asset freezes in national security emergencies — does not grant the President the authority to impose broad import tariffs
• Trump had used IEEPA to impose his sweeping 'Liberation Day' reciprocal tariffs on April 2, 2025, covering nearly every trading partner of the United States
• The 6-3 majority included Trump-appointed Justices Neil Gorsuch and Amy Coney Barrett voting against the administration — a development Trump publicly called 'an embarrassment to their families'
• The ruling immediately invalidated billions of dollars in IEEPA-based tariffs, raising the prospect of over $100 billion in refunds to importers who paid duties in 2025
• The Penn Wharton Budget Model estimated that reversing these tariffs could generate up to $175 billion in refunds and cut future tariff revenue collections by half — unless replaced by new authority
• Trump called the decision 'deeply disappointing' and said he was 'ashamed' of the justices, calling them 'very unpatriotic and disloyal to our Constitution'

What the Ruling Did NOT Affect

• The 25% steel and aluminum tariffs imposed under Section 232 of the Trade Expansion Act of 1962 — these remain fully in force
• The 25% auto tariffs signed under Section 232 on March 26, 2025
• The 25% fentanyl tariffs on China and Mexico imposed under the National Emergencies Act
• Section 301 tariffs on China and other targeted trade practices — these remain valid and legally durable
• The cancellation of de minimis duty-free treatment for low-value imports

2. Trump's Immediate Response: The 10% Global Tariff Under Section 122

Within hours of the Supreme Court ruling, Trump appeared at a White House press conference flanked by Treasury Secretary Scott Bessent, Trade Representative Jamieson Greer, Commerce Secretary Howard Lutnick, and Solicitor General D. John Sauer. His message was defiant and immediate: he had alternatives, and he was using them — right now.

The Legal Basis: Section 122 of the Trade Act of 1974

• Section 122 was enacted after President Nixon used the Trading with the Enemy Act to impose a temporary 10% import surcharge in 1971 — Congress designed Section 122 as a codified, narrower version of that emergency tariff authority
• The law allows the President to impose import surcharges of up to 15% for a maximum of 150 days when the United States faces 'large and serious' balance-of-payments deficits
• No prior investigation is required before invoking Section 122 — allowing for rapid executive action the same day as the Supreme Court ruling
• The US recorded a staggering trade deficit of $901 billion in 2025 — barely budging despite the previous year of tariffs — giving Trump the factual basis to invoke balance-of-payments justification
• The tariffs expire automatically after 150 days (around mid-July 2026) unless Congress votes to extend them — a significant constraint vs. the theoretically unlimited IEEPA authority
• The White House document confirmed the 10% tariff takes effect February 24, 2026 at 12:01 a.m. EST

Key Exemptions in the 10% Order

• Selected agricultural products — including beef, tomatoes, and oranges — were initially exempted
• Some critical minerals and metals were carved out
• Pharmaceuticals were initially listed among exceptions
• Some electronics and passenger vehicles were also initially excluded
• USMCA-compliant goods from Canada and Mexico continue under existing arrangements

Trump's Own Words on Signing

• 'It is my Great Honor to have just signed, from the Oval Office, a Global 10% Tariff on all Countries, which will be effective almost immediately' — Trump, Truth Social post, February 20, 2026
• 'Today I will sign an order to impose a 10% global tariff under Section 122 over and above our normal tariffs already being charged' — Trump, White House press conference
• 'We have alternatives. Great alternatives' — Trump, responding to the Supreme Court decision

3. 24 Hours Later: Trump Raises the Global Tariff to 15%

In a move that stunned even seasoned trade policy observers, President Trump announced on Saturday, February 21, 2026 — less than 24 hours after signing the original 10% order — that he was raising the global tariff to the maximum legally permitted level of 15% under Section 122.

• Trump announced the increase via a post on Truth Social: 'I, as President of the United States of America, will be, effective immediately, raising the 10% Worldwide Tariff on Countries, many of which have been ripping the US off for decades, without retribution (until I came along!), to the fully allowed, and legally tested, 15% level'
• The move pushed the tariff directly to the ceiling of what Section 122 legally permits — leaving no further room to escalate under this authority
• The 15% rate applies globally — over and above any existing tariffs already in place on specific countries or sectors
• The announcement came just one day after Treasury Secretary Scott Bessent acknowledged these alternative methods are 'not as efficient and not as powerful' as the IEEPA authority they are replacing
• Bessent simultaneously stated that using Section 122 combined with enhanced Section 232 and Section 301 authorities 'will result in virtually unchanged tariff revenue in 2026'

4. Impact On India of Trump 15% tariff?

India — ~18%

• India's reciprocal tariff rate was reduced from 25% to 18% in February 2026 after Modi's government pledged to curb Russian oil purchases
• The 25% secondary tariff on India for buying Russian oil was separately withdrawn in February 2026
• India's net tariff exposure remains above the 15% baseline, with ongoing negotiations around trade deal terms

5. Economic Impact: What It Means for Americans and the Global Economy

Impact on American Households

• Trump's tariffs already added $1,000 in tax expenses for the average US household in 2025, according to the conservative-leaning Tax Foundation
• Data from the JPMorgan Chase Institute found that tariffs paid by midsize US businesses tripled in 2025
• Economists broadly agree that tariff costs are borne primarily by domestic importers and ultimately passed to consumers through higher prices on goods ranging from electronics to clothing to food
• The Trump administration disputes this analysis — the National Economic Council Director called a New York Federal Reserve paper on tariff pass-through 'the worst paper I've ever seen in the history of the Federal Reserve System'
• The farming sector lost close to $57 billion under Trump's tariff regime — though agricultural exemptions in the new order provide partial relief

6. The Legal Landscape: What's Still Standing, What Was Struck Down

Tariffs Now Invalid (IEEPA-Based)

• Liberation Day reciprocal tariffs of at least 10% on nearly all countries — imposed April 2, 2025
• The two additional 10% IEEPA tariffs on China
• Country-specific IEEPA tariffs that had been negotiated into bilateral trade deals

Tariffs That Remain Fully Legal and Enforceable

• 25% steel and aluminum tariffs under Section 232 — described by Trump trade chief Jamieson Greer as 'incredibly legally durable'
• 25% auto tariffs under Section 232
• Section 301 tariffs on China for unfair trade practices
• 25% fentanyl tariffs on Canada, Mexico, and China under the National Emergencies Act
• 15% global tariff under Section 122 of the Trade Act of 1974 — the new authority (valid for 150 days)

What Comes After 150 Days?

• Section 122 tariffs automatically expire after 150 days without Congressional approval — approximately mid-July 2026
• The Trump administration has signaled it will pursue enhanced Section 232 investigations and Section 301 actions to replace revenue from expiring Section 122 authority
• Trump personally signaled he will find additional legal pathways: 'Other alternatives will now be used to replace the ones that the court incorrectly rejected. We'll take in more money, and we'll be a lot stronger for it'
• The administration is also pursuing new Section 301 investigations into possible unfair trade practices as a springboard for additional targeted tariffs

7. Global Reaction: How the World Is Responding

European Union

• EU trade ministers are reviewing whether the post-IEEPA 15% tariff framework changes the legal status of the negotiated bilateral deal reached in 2025
• EU officials are monitoring whether the 150-day limit on Section 122 authority means tariffs could partially expire, requiring new negotiations
• The EU remains in active WTO dispute consultations — though without a functioning Appellate Body, formal resolution is effectively blocked

China

• China faces the harshest combined tariff exposure globally: 35% total effective rate
• Beijing has previously responded to US tariffs with targeted counter-tariffs on US agricultural exports, soybeans, and industrial goods
• The shift away from IEEPA to Section 301/232 mechanisms means tariffs on China in particular are likely to be more durable and legally unassailable

India

• India secured a reduction in its reciprocal tariff from 25% to 18% in early February 2026 — partially benefiting from the IEEPA invalidation
• The Modi government is monitoring whether the 15% universal tariff restores part of the burden just reduced
• India's agreement to curtail Russian oil purchases was the diplomatic currency for its tariff reduction — a geopolitical precedent with far-reaching implications

South Korea

• South Korea convened an emergency inter-ministerial cabinet meeting on Saturday February 21, 2026 to respond to the combined SCOTUS ruling and new 15% tariff announcement
• South Korean automakers — particularly Hyundai and Kia — face significant cost exposure from the 15% universal rate stacked on top of existing auto tariffs

❓ Frequently Asked Questions (FAQs)

Q1. Why did Trump announce a new global tariff after the Supreme Court ruling?

• The Supreme Court ruled 6-3 on February 20, 2026 that Trump's previous IEEPA-based tariffs were illegal — striking down billions of dollars in import duties. Within hours, Trump responded by signing a new 10% global tariff under a different legal authority: Section 122 of the Trade Act of 1974. He then raised it to 15% the following day. The message was clear — the tariff agenda was not ending, it was simply being rerouted through alternative legal pathways.

Q2. What is Section 122 of the Trade Act of 1974?

• Section 122 is a provision of US trade law that allows the President to impose import surcharges of up to 15% for a maximum of 150 days when the US faces 'large and serious' balance-of-payments deficits — meaning its imports significantly exceed exports. It was specifically created by Congress after Nixon used the Trading with the Enemy Act to impose a 10% tariff in 1971. No prior investigation is required, enabling rapid executive action. The tariffs expire automatically after 150 days unless Congress approves an extension.

Q3. What is the difference between the old IEEPA tariffs and the new Section 122 tariffs?

• IEEPA (International Emergency Economic Powers Act) theoretically allowed unlimited tariffs of any size for an indefinite period under a declared national emergency. The Supreme Court ruled this exceeds IEEPA's intended scope. Section 122 is more constrained: it caps tariffs at 15%, limits their duration to 150 days, and ties them specifically to balance-of-payments concerns rather than broadly defined national emergencies. The new tariffs are legally cleaner but significantly less powerful as a long-term trade policy tool.

Q4. Will American consumers face higher prices?

• Yes — and economists broadly agree this is likely. Tariffs are ultimately paid by US importers and passed through to consumers in the form of higher prices. The Tax Foundation found that Trump's previous tariffs added $1,000 in costs for the average US household in 2025. The new 15% global tariff, stacked on existing duties, is expected to add further inflationary pressure — particularly on electronics, clothing, household goods, and vehicles.

Q5. Can importers get refunds for IEEPA tariffs they already paid?

• The Supreme Court ruling opens the legal door to refund claims for IEEPA tariffs paid in 2025 — potentially $100-175 billion according to the Penn Wharton Budget Model. However, Trump has indicated his administration does not plan to proactively issue refunds, suggesting years of additional litigation. The Liberty Justice Center has committed to helping small businesses navigate the refund process through a centralized legal support network.

Q6. When do the new 15% tariffs expire?

• Section 122 tariffs are legally constrained to 150 days from their effective date of February 24, 2026 — meaning they automatically expire around mid-July 2026 unless Congress votes to extend them. Whether Trump can secure Congressional approval or will pivot to yet another legal authority by that point remains one of the central trade policy questions of 2026.

Q7. How are other countries reacting to the 15% global tariff?

• South Korea convened an emergency inter-ministerial meeting. The EU is reviewing whether its negotiated 15% deal framework survives under new authority. China — now facing 35% total tariffs — is reassessing counter-tariff options. India, which had just secured a reduction to 18%, is concerned about the 15% universal rate eating into those gains. Multiple countries have active WTO dispute consultations underway, though the absence of a functioning Appellate Body means formal rulings are effectively blocked.

Q8. Is the Trump tariff regime good or bad for the US economy?

• This is genuinely contested. The administration argues tariffs protect domestic manufacturing jobs, generate significant federal revenue ($287 billion in 2025), and provide diplomatic leverage. Critics — including economists across the political spectrum — argue that costs fall on American businesses and consumers, not foreign exporters, and that supply chain disruption, retaliatory tariffs on US farm exports, and trade policy uncertainty outweigh the gains. The $1,000 average household cost and the farming sector's $57 billion loss are among the most cited metrics against the policy.