A landmark ruling by the Supreme Court of the US invalidating the Administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs has reshaped the US trade policy landscape, according to SBI Research. The Court held that IEEPA — historically unused for tariff imposition — does not provide a footing for such measures in peacetime. However, the executive swiftly pivoted to the Trade Act of 1974, invoking Section 122 to impose a temporary 10% global tariff on imports for 150 days starting February 24, 2026 — the first-ever use of this authority. The levy can run until July unless extended by Congress. Exemptions include United States-Mexico-Canada Agreement-compliant goods from Canada and Mexico, alongside existing national security tariffs under Sections 232 and 301. SBI noted that while the ruling disrupts the IEEPA framework, alternative statutory routes remain open. The decision may also cloud ongoing trade deals negotiated under the earlier tariff regime, heightening short-term uncertainty as a finely balanced US Congress assumes decisive authority, said a report.
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