The move replaces the invalidated tariffs with a new universal levy under Section 122 of the Trade Act of 1974, a statute that has never before been used to impose tariffs. But there's a catch: Section 122 tariffs are capped at 15% and expire after 150 days unless Congress votes to extend them.
Here's everything importers need to know.
What the Supreme Court Actually Ruled
Chief Justice John Roberts delivered the majority opinion in Learning Resources, Inc. v. Trump, holding that the International Emergency Economic Powers Act "does not authorize the President to impose tariffs." The 6-3 decision invalidated the legal basis for the bulk of the tariffs enacted throughout 2025, including the "Liberation Day" reciprocal tariffs and the fentanyl-related duties on Canada, Mexico, and China.
The ruling effectively wiped out tariff rates that had pushed the average U.S. effective tariff rate to 19.6%, the highest level since 1935, according to the Yale Budget Lab.
Critically, the Court did not address whether importers are entitled to refunds on the estimated $142 billion in IEEPA duties already collected. That question has been remanded to the Court of International Trade, and trade attorneys expect the process to take months if not years to resolve.
Trump's Response: Section 122 Global Tariff
Within hours of the ruling, Trump attacked the justices in personal terms and announced he would invoke Section 122 to impose a replacement tariff. On Friday evening he signed an executive order establishing a 10% global tariff. By Saturday morning, he raised it to 15%, the statutory maximum, via a Truth Social post.
Section 122 of the Trade Act of 1974 allows the president to impose tariffs of up to 15% for a maximum of 150 days to address large and serious balance-of-payments deficits. This authority has never been tested in court and has never been used to impose tariffs at this scale.
The 15% rate takes effect at 12:01 a.m. ET on February 24, 2026, with a savings clause covering goods already in transit before that deadline.
What's Still Active: The Full Tariff Stack
The SCOTUS ruling only affected tariffs imposed under IEEPA authority. Several other tariff programs remain fully in effect:
Section 301 (China): Tariffs ranging from 25% to 100% on Chinese goods remain active. These were enacted under a different legal authority and were not challenged in the SCOTUS case. Combined with the new 15% Section 122 tariff, China now faces a total effective rate of approximately 35% on many product categories.
Section 232 (Steel, Aluminum, and More): The 50% tariff on steel and aluminum imports remains in place, as do the 25% tariff on automobiles, the 50% tariff on copper, and the 100% tariff on certain pharmaceuticals. These tariffs are authorized under the Trade Expansion Act of 1962 and were unaffected by the ruling.
Antidumping and Countervailing Duties (AD/CVD): All existing AD/CVD orders remain in effect. These are administered by the Commerce Department and the International Trade Commission through an entirely separate legal process.
Section 122 (New): The 15% universal tariff applies to all imports not otherwise exempt. USMCA-qualifying goods from Canada and Mexico are carved out, as are goods already subject to Section 232 tariffs to avoid double-stacking.
The 150-Day Clock
The most significant limitation of Section 122 is the built-in expiration. Without Congressional action, the 15% tariff automatically sunsets around July 20, 2026.
Getting Congress to extend or codify these tariffs would require navigating a deeply divided legislature. While many Republican lawmakers support tariffs in principle, the specific mechanism and rates would likely face opposition from free-trade Republicans and the Democratic minority.
For importers, this creates a planning challenge. Do you delay shipments hoping the tariff expires? Do you accelerate orders to lock in the current rate before potential changes? The uncertainty is the point and it's exactly the kind of environment where having accurate, real-time tariff data matters most.
What About Refunds?
The potential for IEEPA tariff refunds is the biggest open question coming out of the ruling. U.S. Customs and Border Protection collected an estimated $142 billion in IEEPA-based duties throughout 2025. Some estimates suggest total refund claims could reach $175 billion when including interest and additional costs.
However, the path to refunds is far from clear. The Supreme Court declined to address the question directly, and the Trump administration has signaled it will fight refund claims. Importers who filed timely protests with CBP are in the strongest position, but the process will likely require navigating the Court of International Trade and could take years.
Trade attorneys are advising importers to preserve their claims by filing protests on any unliquidated IEEPA entries and consulting with customs counsel on next steps.
How This Affects Landed Costs
For a practical example, consider an importer bringing in consumer electronics from Vietnam:
Before SCOTUS (under IEEPA): Base MFN duty + IEEPA reciprocal tariff of 46% = total effective rate of approximately 49%.
After SCOTUS + Section 122: Base MFN duty + 15% Section 122 = total effective rate of approximately 18%.
That's a massive reduction, but still significantly higher than the pre-2025 baseline. And for goods from China, the math is much less favorable due to the surviving Section 301 tariffs.
The bottom line: landed costs dropped dramatically for most non-China origins, but the tariff landscape remains complex with multiple overlapping programs that vary by product and country of origin.
What Importers Should Do Right Now
1. Update your cost models. If you were budgeting for IEEPA rates, your landed costs just changed significantly. Recalculate immediately using current rates.
2. Review your supply chain. Countries that were heavily penalized under IEEPA (like Vietnam at 46% and the EU at 20%) are now much more competitive at the flat 15% rate. This may change sourcing decisions.
3. Preserve your refund claims. If you paid IEEPA tariffs in 2025 or early 2026, file protests on any unliquidated entries. The refund process is uncertain, but you can't claim what you don't file for.
4. Plan for the 150-day window. Section 122 tariffs expire around July 20. Build contingency plans for both scenarios — extension and expiration.
5. Monitor for additional actions. Trump has indicated he will pursue Section 301 investigations and other tariff authorities to replace IEEPA. More changes are coming.
Use the Gateway Tariff Calculator
Our tariff calculator has been updated to reflect all changes as of February 21, 2026, including the new 15% Section 122 global tariff, surviving Section 301 and Section 232 duties, and the deactivation of all IEEPA-based rates.
Calculate your updated landed costs now at tariff.gatewaylines.com.