As we noted in our previous article HERE, on February 20, 2026, the U.S. Supreme Court held that President Donald Trump did not have the authority under the International Emergency Economic Powers Act to impose tariffs. That ruling struck at the very foundation of the White House’s tariff strategy as it had existed until then. The administration’s response, however, was immediate. On the very same day, the President issued a proclamation under Section 122 of the Trade Act of 1974, introducing a new temporary global tariff of 10 percent ad valorem on imported goods, effective from February 24, 2026, for a period of 150 days.
The White House Did Not Retreat After the Judgment, It Changed the Legal Basis
Following the U.S. Supreme Court’s ruling, it became clear that the administration had no intention of abandoning tariffs as one of its principal instruments of trade policy. What occurred, therefore, was not a retreat from the tariff line, but its immediate transfer onto a different statutory footing. What could no longer be sustained under IEEPA, the White House sought to replace through Section 122 of the Trade Act of 1974, a provision that expressly permits the imposition of a temporary import surcharge in the event of serious international payments problems. From a legal drafting and institutional perspective, this is a clear attempt to preserve tariff pressure through an instrument that is, at least textually, closer to a congressionally conferred tariff power than the IEEPA regime ever was.
What This Regime Allows and Where Its Limits Lie
Section 122 of the Trade Act of 1974 permits the President to impose a temporary import surcharge of up to 15 percent, generally for no more than 150 days unless its continuation is approved by Congress. The distinction from IEEPA is fundamental. Here, the statute expressly contemplates the imposition of a tariff or import surcharge. At the same time, however, it is not an open ended and temporally unlimited general clause. The regime is tied to allegations of serious balance of payments difficulties and is structured as a temporary measure. It is therefore apparent at first sight that this mechanism is not designed to replace IEEPA in full and without qualification, but rather to bridge the period during which the administration prepares further legal steps.
A Temporary Tariff at the 10 Percent Level
For business practice, the decisive point at present is the need to distinguish political declarations from the legally operative state of affairs. On February 21, 2026, President Trump publicly announced that the new rate would be increased to 15 percent, and other members of his administration indicated the same. The legal acts and customs implementation, however, continue for the time being to proceed on the basis of a 10 percent regime. The presidential proclamation of February 20 itself introduced a 10 percent tariff, and U.S. Customs subsequently confirmed expressly that this is the rate actually being collected from February 24, 2026 onward. Media reporting and specialist commentary are likewise aligned in treating the 15 percent figure, at least for now, as a publicly announced intention rather than a completed and fully implemented legal state. As matters stand today, the correct starting point is therefore that the 10 percent regime is in force, while 15 percent remains an announced next step that still requires separate formal implementation.
This Is Only an Interim Regime
The new regime under Section 122 should not be understood as a standalone and final solution. It is better viewed as a temporary bridge between the fall of the IEEPA tariffs and the next phase of the administration’s tariff policy. From the very first hours after the Court’s decision, the White House signaled that it intended to reinforce other tariff instruments in parallel, most notably the regimes under Sections 301 and 232. From the standpoint of longer term durability, those regimes are more significant for the administration, even though they are procedurally more demanding and require a greater number of formal steps. The current 10 percent tariff should therefore be read primarily as a measure designed to buy time for the administration, preserve tariff revenue, and create space for the launch of further investigations and sector specific measures.
The Exemptions Regime Is Also Changing
The change in legal basis does not alter only the rate. It also changes the internal architecture of exemptions. Under the new regime, a number of exemptions have been retained, including for goods qualifying under the United States Mexico Canada Agreement, for goods already subject to measures under Section 232, and for certain pharmaceuticals, electronics, aerospace products, and other strategic categories. At the same time, however, it is becoming clear that not all prior exemptions or tariff relief negotiated under the earlier regime are seamlessly transferable into the new system. The Financial Times has pointed out that, following the shift to Section 122, some earlier exemptions tied to specific countries were not preserved, which has already manifested itself in practice, for example, in relation to Belgian diamonds and Portuguese cork. The new regime therefore changes not only the percentage rate, but also the underlying logic of which exemptions can still be defended as a matter of law and which cannot.
The Scope for New Litigation Has Not Disappeared
The fact that the White House has now turned to a more explicit statutory basis does not mean that a new wave of disputes is excluded. On the contrary, the legal debate is merely moving to a different focal point. One of the principal questions going forward will be whether the conditions for invoking Section 122 are in fact satisfied, that is, whether it is genuinely possible to speak of the sort of international payments problems to which that provision is directed. For this reason, members of the administration themselves have emphasized the need for a procedurally sound and sustainable approach to further tariff action and to any eventual increase to 15 percent. From the perspective of future litigation, the present state of affairs does not represent closure.
What This Means in Practice for Businesses
Businesses now find themselves in a situation in which it is no longer sufficient to assess the impact of tariff measures only once. Instead, it is necessary to monitor the rapidly evolving legal and customs framework on an ongoing and very careful basis. On the one hand, there is now an opening for claims seeking repayment of tariffs paid under the IEEPA regime. On the other hand, new obligations and new risks are arising simultaneously under the currently effective 10 percent regime from February 24, 2026, including its exemptions, its interaction with other tariff measures, and the possibility of a subsequent increase to 15 percent.
Companies must therefore devote heightened and sustained attention to this area, because it is an environment developing with exceptional speed and one in which the legal position, customs implementation, and practical impact on commercial relationships may all change within a short period of time. At the same time, it must be assumed that the administration intends to preserve tariff pressure through additional legal mechanisms as well, which in turn requires rigorous work with customs data, contractual documentation, pricing structures, and the overall configuration of supply chains.
In many cases, the issue will no longer concern only the tariff rate itself, but also who may have a claim to repayment, who ultimately bears the tariff burden, and how any refunded sums should be reflected in the commercial relationship between the different entities in the chain. In an environment as unstable and fast moving as this, early identification of risks, close monitoring of further developments, and the ability to respond flexibly to new legal and customs realities will be decisive.
Conclusion
Following the U.S. Supreme Court’s decision of February 20, 2026, it has become clear that the Trump administration does not regard the fall of the IEEPA tariffs as the end of its tariff policy. On the contrary, it shifted the centre of gravity almost immediately to the new regime under Section 122 of the Trade Act of 1974 and introduced a temporary global tariff of 10 percent while openly communicating its ambition to move further to 15 percent. From a legal standpoint, this is an attempt to replace an invalidated tariff instrument with another statutory basis. From a business perspective, it represents the continuation of tariff uncertainty in a new legal and procedural form.
Our law firm has long specialised in customs and tax law and advises clients in situations that require not only precise knowledge of the legal framework but also continuous monitoring of rapidly evolving practice and its commercial consequences. We are following developments in the area of U.S. tariffs on an ongoing basis and are able to provide clients with continuous monitoring, an individual legal assessment of their position, an evaluation of the impact on specific imports and supply relationships, and recommendations as to the most appropriate next steps. At the same time, we are able to provide legal representation in connection with the assertion and recovery of claims relating to tariffs already paid, including the coordination of further action vis à vis customs authorities, dispute proceedings, and foreign partners.
