On February 20, 2026, two seismic events reshaped the US tariff landscape within hours. In the morning, the Supreme Court ruled 6-3 in V.O.S. Selections Inc. v. United States to strike down all IEEPA reciprocal tariffs. By evening, President Trump had signed a new 10% global tariff under Section 122 of the Trade Act of 1974. The new tariff takes effect February 24 but has a critical 150-day time limit — it expires approximately July 24, 2026 unless Congress extends it. This guide covers both events and what importers need to do right now.
What the Court Decided
The Supreme Court ruled 6-3 that President Trump exceeded his authority under IEEPA when he imposed reciprocal tariffs on imports from 80+ countries. The majority opinion held that IEEPA grants the president power to address national emergencies through economic sanctions, but does not authorize the imposition of tariffs — a power the Constitution reserves to Congress. The Court upheld earlier rulings from the Court of International Trade and the Federal Circuit, both of which had found the tariffs unconstitutional. The three dissenting justices argued for broader executive authority in trade matters.
What's Invalidated: IEEPA Reciprocal Tariffs
All tariffs imposed under IEEPA authority since April 2025 are now invalidated. This includes: the 10% baseline reciprocal tariff applied to nearly all countries, higher country-specific rates (Vietnam 46%, Thailand 36%, Taiwan 32%, South Korea 25%, EU 20%, China 10% reciprocal + 10% fentanyl), and any modifications to these rates such as the US-China truce adjustments and the US-India interim agreement rate reductions. The effective reciprocal tariff rate for ALL countries is now 0%. Countries like Vietnam, which faced a 46% reciprocal tariff, see the most dramatic reduction.
What Still Applies: Section 232 and Section 301
Not all tariffs were struck down. Section 232 tariffs (imposed under national security authority) remain in full effect: steel at 25%, aluminum at 25%, autos at 25%, copper at 50%, semiconductors at 25%, and lumber at 10%. These tariffs were imposed under a different law and were not challenged in this case. Section 301 tariffs on China also remain — these were imposed under trade law authority, not IEEPA. Most Chinese goods still face 25-100% Section 301 tariffs on top of standard MFN rates. The combination of Section 301 and standard MFN rates means Chinese imports still face approximately 25-30% effective rates on covered products, down from 45%+.
Impact by Country: Who Benefits Most
The countries that benefit most are those with the highest IEEPA rates and no other tariff exposure. Vietnam (was 46%) sees the largest rate drop and becomes dramatically more competitive for apparel, electronics, and furniture. Bangladesh (was 37%) and Thailand (was 36%) see similar relief for garments and manufactured goods. Taiwan (was 32%) benefits for electronics, though semiconductor Section 232 tariffs remain. EU countries (was 20%) see moderate relief. China benefits less than others because Section 301 tariffs (25-100%) remain — the effective rate drops from ~45% to ~25-30% on covered products. USMCA countries (Canada, Mexico) see minimal impact since IEEPA rates were already largely offset by trade agreement provisions.
Potential Refunds on IEEPA Tariffs Paid
Businesses that paid IEEPA reciprocal tariffs since April 2025 may be eligible for refunds. The process is still being established, but importers should: preserve all customs documentation and payment records, consult with a customs broker or trade attorney about filing refund claims with CBP, and monitor CBP announcements about the refund process. The total amount of IEEPA tariffs collected since April 2025 is estimated at over $100 billion. Refund processing is expected to take months.
Trump's Response: 10% Section 122 Tariff
Hours after the ruling, Trump signed a new 10% flat tariff on all imports under Section 122 of the Trade Act of 1974. This is a TEMPORARY measure — Section 122 has a 150-day time limit, meaning the tariff expires approximately July 24, 2026 unless Congress passes legislation to extend or replace it. The 10% rate applies uniformly to all countries, replacing the variable IEEPA rates that ranged from 10% to 46%. Treasury Secretary Bessent stated that tariff revenue will be 'virtually unchanged in 2026.' The administration is simultaneously launching Section 301 investigations as a basis for more permanent tariffs.
Refunds: Don't Hold Your Breath
Companies that paid IEEPA tariffs since April 2025 may have a legal basis for refunds, but the Trump administration has made clear it will not voluntarily issue them. In a press briefing, Trump stated the refund question 'has to get litigated for the next two years.' Importers who want to pursue refunds should: preserve all customs documentation and payment records, consult with a trade attorney about filing protests or refund claims with CBP, and be prepared for a lengthy legal process. The total IEEPA tariff revenue collected since April 2025 exceeds $100 billion.
What Happens Next
The key date to watch is July 24, 2026 — when the Section 122 tariff expires. Congress must act before then to either extend the 10% rate, pass a different tariff structure, or let tariffs lapse entirely. The administration is pursuing Section 301 investigations against multiple countries as a potential basis for permanent tariffs that would survive legal challenge. Importers should plan for three scenarios: (1) Section 122 expires and base rates go to zero, (2) Congress extends at 10%, or (3) Congress passes higher permanent tariffs. Use our scenario simulator to model the cost impact of each outcome.
Key Takeaway
The SCOTUS ruling + Section 122 replacement creates a fundamentally different tariff landscape. The uniform 10% rate is much lower than the old IEEPA rates for most countries (especially Vietnam at 46%, Thailand at 36%, Taiwan at 32%). But it's temporary — the 150-day clock is ticking. Importers should use the window to optimize supply chains, pursue IEEPA refund claims, and prepare for whatever Congress does by July 24. Use our updated calculator to estimate your new duty rates.
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