The Legal Pivot: From IEEPA Collapse to Section 122 Activation
On February 20, 2026, the U.S. Supreme Court delivered a landmark ruling that fundamentally reshaped the legal architecture of American trade enforcement. In a 6–3 decision, the Court held that the International Emergency Economic Powers Act (IEEPA) — the statutory basis for over $840 billion in annual tariff collections under the prior administration — does not authorize the President to impose broad-based, economy-wide import duties without explicit congressional authorization. The ruling invalidated tariffs covering 97% of U.S. import value assessed since 2025, including the initial 10% ‘global import tariff’ announced on February 19. This was not merely a technical rebuke: it represented the first time since 1977 that the Court struck down a presidential trade action on statutory overreach grounds.
In immediate response, the Trump administration executed a rapid legal contingency plan. Within 12 hours of the decision, President Trump invoked Section 122 of the Trade Act of 1974 — a provision used only twice in history (1983 and 1992), both times for narrowly targeted, sub-$2 billion interventions. Unlike IEEPA, Section 122 permits the President to impose ‘additional duties’ up to 15% ad valorem for up to 150 days, provided the U.S. International Trade Commission certifies a ‘substantial trade imbalance’ with ‘one or more foreign countries.’ Crucially, this certification was issued ex parte and without public hearing — a procedural departure from standard Section 201 or 301 investigations. The resulting tariff regime is neither WTO-consistent nor subject to statutory review timelines, creating unprecedented regulatory uncertainty for global exporters.
Operational Reality: What ‘Global’ Really Means on the Ground
Despite its sweeping label, the ‘global import tariff’ is neither universal nor uniform. Customs and Border Protection (CBP) data released on February 22 confirms that the new 15% rate applies only to Harmonized System (HS) Chapters 25–97 — effectively excluding raw agricultural commodities (Chapters 1–24), certain pharmaceutical intermediates (HS 2933), and all goods entering under Generalized System of Preferences (GSP) waivers. More critically, pre-existing statutory tariffs remain layered atop the new duty: the 19% MFN-equivalent rates for Malaysia and Cambodia, cited by U.S. Trade Representative Jamison Greer, reflect long-standing anti-dumping orders on footwear and textiles — not new policy. In practice, Cambodian garment exporters now face a cumulative burden of 19% + 15% = 34% on non-GSP-eligible shipments, while Vietnamese electronics imports bear 7.5% (MFN) + 15% = 22.5%.
This creates a de facto ‘tariff hierarchy’ across supply chains:
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