The United States suspends "IEEPA Tariffs" and shifts to a new import tariff of up to 15%

IEEPA is not a "license" to impose tariffs

On February 20, 2026, the Supreme Court of the United States, by a 6–3 majority, ruled that the imposition of a series of tariffs based on the International Emergency Economic Powers Act (IEEPA) was inconsistent with the law, thereby reaffirming the “checks and balances” role of the judicial branch in economic decisions with international implications. Reuters described this as a noteworthy development, as previous IEEPA tariff packages had been designed to be “broad in scope – rapid in implementation” under the designation of a state of emergency.

The crux of the ruling does not lie solely in the question of whether an executive order was “right or wrong,” but in the message concerning the boundary of authority: the IEEPA mechanism, originally intended for emergency situations, cannot be “extended” to substitute for the legislative logic and tariff authorization framework inherently vested in Congress and the specialized trade law system.

SaMore than three days after the ruling, U.S. Customs and Border Protection (CBP) announced that it would cease collecting IEEPA tariffs as from 12:01 a.m. EST (05:01 GMT) on February 24, 2026, and would simultaneously deactivate/lock the relevant tariff codes in its operational system. Reuters reported that CBP did not specify why the suspension was not implemented immediately and had not yet disclosed details of any refund mechanism for importing enterprises.

Through its technical guidance channel, CBP’s CSMS notice emphasized that IEEPA tariff lines would no longer be effective in the ACE (Automated Commercial Environment) as from February 24, 2026, and that this change affects only IEEPA duties and does not “touch” other obligations.

The policy message here is clear: while the executive branch may adjust its policy instruments, implementation at the border must comply with the “effective point” of the judicial decision and the enforcement guidance of the customs authority.

According to CBP/Reuters, the duties subject to suspension belonged to the group of executive orders imposing tariffs based on IEEPA during the previous term. The political–trade focal point lies in the “reciprocal” tariff package and other broad-based measures, which generated immediate cost effects on global supply chains.

However, it should be assessed with caution: the suspension of collections under IEEPA does not mean that the United States is “de-escalating” tariffs. Instead, Washington immediately established an alternative legal “runway” to maintain its trade leverage.

The refund issue - An "open door" with potentially prolonged procedures

A major consequence of the ruling is the question: how will the tariffs already collected be handled? Reuters cited an estimate by the Penn Wharton Budget Model indicating that more than USD 175 billion in Treasury revenue associated with the IEEPA tariff packages could face the risk of repayment, depending on the course of litigation and the guidance of lower courts.

However, in practice, the situation is rarely a matter of “one click – one result.” Any refund (if granted) will be contingent upon: (i) the litigation process and the orientation of the specialized trade courts; (ii) how U.S. Customs and Border Protection (CBP) instructs enterprises to substantiate duties already paid; and (iii) issues relating to statutes of limitation, documentation, set-off, and related matters. In other words, “cessation of collection” does not necessarily mean “prompt reimbursement.”

On February 20, 2026, the White House issued the document entitled Ending Certain Tariff Actions to terminate certain tariff actions based on the International Emergency Economic Powers Act (IEEPA), while affirming that this does not affect tariff measures adopted under other statutory authorities.

More importantly, Washington activated a rarely used instrument: Section 122 of the Trade Act of 1974. In the Proclamation on a “temporary import surcharge,” the White House argued that there exist “fundamental international payments problems” and that it is necessary to impose import surcharges (ad valorem duties) to address a serious balance-of-payments deficit; this constitutes the legal basis for the substitute tariff package after IEEPA was “blocked” by the Court.

Reuters reported that President Donald Trump initially announced the substitute tariff package under Section 122 at a rate of 10%, to be applied for 150 days to all trading partners, while the White House/Administration planned to initiate additional investigations/measures under trade and national security laws in preparation for a longer-term scenario.

Shortly thereafter, Reuters noted that Mr. Trump declared an increase of the global tariff rate to 15%, the ceiling commonly referenced in discussions of Section 122.

The communicative implication that should be emphasized is that the United States is not “withdrawing” tariffs, but rather restructuring its legal foundation in order to continue pursuing the objective of “trade rebalancing,” while opening a new phase of volatility, given the inherently temporary nature of Section 122.

From the Chinese side, Reuters cited information that the Ministry of Commerce of the People’s Republic of China stated it was “conducting a comprehensive assessment” of the ruling, while criticizing unilateral tariffs as harmful and destabilizing, in the context of Washington’s shift to the new mechanism under Section 122.

From a market perspective, the Associated Press (AP) reported that U.S. stock futures declined and Asian markets fluctuated following news that the Supreme Court of the United States rejected most of the broad-based tariff packages, indicating that investors are reassessing trade risks and the policy trajectory of Washington.

In a broader view, Reuters assessed that the ruling may constrain immediate leverage but does not eliminate uncertainty for trading partners, as the United States still retains “toolboxes” such as investigations under trade laws and national security mechanisms.

The ruling of the Supreme Court of the United States compelled the United States to cease collecting a series of duties based on the International Emergency Economic Powers Act (IEEPA) as from February 24, 2026; however, Washington immediately demonstrated a consistent orientation: not abandoning tariffs, but shifting the legal “foundation” to Section 122 in order to maintain pressure and the objective of trade rebalancing. The coming period will constitute a “policy race” among technical milestones at the border, refund litigation, and the possibility that the United States may expand measures under other authorities - requiring enterprises to monitor developments closely, respond promptly, and manage contracts rigorously.