The Supreme Court Kills Trump's Tariffs. He Replaces Them in Four Hours.

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Today, we look at the Supreme Court’s suckerpunch to Trump's tariffs.

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The take: The Supreme Court just handed Trump his biggest legal defeat. He shrugged, grabbed a dusty statute, and rebuilt the tariff wall before dinner.

What happened: The Court ruled 6–3 on 20 February that Trump's IEEPA tariffs exceeded presidential authority.

What he did next: Trump invoked Section 122 of the Trade Act of 1974 within hours — 10% that evening, 15% by Saturday morning. Markets rallied on the ruling. The Nasdaq led gains.

Why it matters: Section 122 caps tariffs at 15% for 150 days. No president has ever used it. The legal ground is untested.

What to watch: The 15% tariff kicks in on 24 February; trade economists already say Section 122's legal basis doesn't hold either, because the US doesn't have a balance-of-payments crisis.

Constitutional law scholars spent a year on this case. Trump spent an afternoon on Plan B.

[Analysis] Norton Rose Fulbright, 20 February 2026

Background: Norton Rose's global trade team published a same-day legal breakdown of refund mechanics after the IEEPA ruling. They advise importers across 50+ jurisdictions.

Key finding: The court order covers every importer in the country — not just the companies that sued. Under US law, any tariff collected without proper authority is money the government has to give back. That means every business that paid IEEPA duties has a potential claim, whether or not it joined the lawsuit.

Why this matters now: Trump suggested refunds would need to be "litigated for two years." The legal structure says otherwise. Importers have 180 days from the date their shipments are processed to file for refunds with US Customs. For the earliest IEEPA shipments from February 2025, that window is already closing.

Source

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The ruling voids every IEEPA tariff back to day one.

That includes Liberation Day reciprocals and the fentanyl duties on Canada, Mexico and China — plus smaller levies like the 40% hit on Brazil.

Penn Wharton puts the refund exposure at $175 billion. The government was collecting roughly $500 million a day under IEEPA.

More than half of all US customs revenue.

Trump's fix is Section 122 — a 1974 law built for currency crises. The US stopped having those crises in 1973.

Trade scholars at the Cato Institute and elsewhere argue the statute was obsolete before the ink dried.

Section 122 is a bridge, not a destination.

The administration launched fast-tracked trade investigations on most major partners the same day.

Section 122 buys 150 days of leverage while those probes build the permanent replacement.

Mid-July is the handoff date.

Pro: The ruling restores constitutional order — Congress holds the taxing power, and no emergency declaration should bypass it.

Con: Kavanaugh warned the refund process will be a "mess," and trade deals the IEEPA tariffs helped broker — worth trillions, spanning China to the UK to Japan — now face fresh legal uncertainty.

Our read: The Court drew a bright line on presidential tariff power. Trump came up with a workaround in four hours. The open question is whether Section 122 survives its own legal challenge before the 150 days run out.

US Supreme Court slip opinion, Learning Resources, Inc. v. Trump, 607 U.S. (2026)

First time the Court said a tariff decision was too big for a president to make alone. The box stays checked for the next president, too.

$175 billion owed. $0 refunded. — Penn Wharton Budget Model

Fortune: Trump's Section 122 plan may also be illegal — Why: Trade economists explain the balance-of-payments deficit Section 122 requires doesn't actually exist. [Analysis]

Mothership: Singapore's DPM Gan says 15% tariff "in all likelihood" applies — Why: The US ran a US$3.6 billion goods trade surplus with Singapore in 2025. Washington's taxing a customer, not a competitor. [Report]

Bernama: Malaysia studying court ruling, ART still unratified — Why: Malaysia's negotiated 19% rate under the trade deal is higher than the new 15% blanket tariff — and US Trade Rep Greer said countries must honour their agreed rates regardless. Awkward maths, locked in. [Report]

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