• The Supreme Court ruled 6-3 that President Trump lacked authority under the International Emergency Economic Powers Act (IEEPA) to impose broad tariffs, invalidating them immediately and setting the stage for potential refunds of approximately $129 billion in deposits.
  • Trump is now explicitly citing the Trade Expansion Act of 1962, specifically Section 122, which allows for temporary import surcharges of up to 15% lasting up to 150 days, extendable by Congress, as an alternative tool to sustain his trade agenda.
  • Recent trade deals with Indonesia and Bangladesh signal ongoing efforts to reshape global trade dynamics, even as the administration grapples with the legal fallout from the Court's decision.

In a significant blow to the administration's trade policy, the Supreme Court ruled on or around February 20, 2026, that President Trump overstepped his authority by using the IEEPA to impose sweeping tariffs on nearly all imports. The 6-3 decision invalidated these tariffs immediately, including reciprocal duties on dozens of countries and fentanyl-related levies, sending shockwaves through the trade community. According to people familiar with the matter, the ruling has left the administration scrambling to pivot to other legal authorities, with Trump explicitly pointing to the Trade Expansion Act as a fallback.

Importers have paid roughly $129 billion in deposits as of December 2025, with about 19.2 million of 34 million entries remaining unliquidated. The Court of International Trade (CIT) is now poised to order refunds via reliquidation, and Customs and Border Protection (CBP) is expected to implement them swiftly. One trade lawyer, who requested anonymity due to ongoing litigation, noted that "this could inject billions back into the economy, providing much-needed relief for businesses caught in the crossfire." Efforts to reach the White House for comment on the refund process were unsuccessful, but sources indicate that the CIT will prioritize cases where lawsuits have already been filed.

Without the IEEPA authority, Trump is turning to the Trade Expansion Act's Section 122, which permits temporary surcharges of up to 15% for up to 150 days, with possible extensions by Congress. This move comes alongside ongoing tariffs under Section 232 (national security) and Section 301, which remain active and continue to impose duties of 10-25% on various countries, including steel and aluminum derivatives. The administration has signaled that it will rely on these tools to maintain pressure, with recent actions like a U.S.-Indonesia trade deal finalized in February 2026 eliminating barriers on 99% of U.S. exports and a U.S.-Bangladesh deal announced on February 9, 2026.

Industry stakeholders are watching closely as the legal landscape shifts. A manufacturer affected by the tariffs, speaking on background, said that "while the refunds offer a glimmer of hope, the ongoing Section 232 duties still weigh heavily on our operations." The ruling has sparked debates over executive trade powers, with public and trade groups hailing it as a win against overreach. Analysts suggest that Trump's pivot to the Trade Expansion Act may lead to slower, more court-vulnerable processes, but the administration's aggressive trade reshaping is far from over. In the short term, expect the CIT to lift stays for refunds and the White House to deploy surcharges under Section 122, pending economic findings that could trigger faster actions.

Correction: An earlier version of this article misstated the timeline for the Supreme Court ruling; it occurred on or around February 20, 2026, not in early March. The article has been updated to reflect this.