The US Supreme Court on 20 February 2026 struck down the administration’s use of the International Emergency Economic Powers Act (IEEPA) to levy sweeping import duties, holding 6–3 that tariffs are a tax power reserved to Congress. Within hours, the White House issued a proclamation for a temporary 10% import surcharge under Section 122 of the Trade Act of 1974, effective from Tuesday, 24 February 2026. The next day, the President said he would increase the rate to 15%, the statutory maximum. Formal timing for the uplift has not yet been published. (supremecourt.gov)
Chief Justice John Roberts’ opinion, joined by Justices Sotomayor, Kagan, Gorsuch, Barrett and Jackson in relevant parts, found that IEEPA contains no clear authorisation to impose tariffs and that Congress alone holds the taxing power in peacetime. That renders IEEPA an improper basis for across‑the‑board import duties, vacating a central element of the administration’s trade strategy. (supremecourt.gov)
Section 122 provides a separate tool: the President may impose a temporary import surcharge of up to 15% for no more than 150 days to address “fundamental international payments problems,” including large and serious US balance‑of‑payments deficits. Continuation beyond that window requires an Act of Congress. This authority has not previously been used at comparable scale. (congress.gov)
Under the proclamation signed on 20 February, the 10% surcharge applies from 00:01 EST on 24 February 2026 for 150 days. The text cites an enlarged current‑account gap and deterioration in the net international investment position as the statutory basis for action and specifies that the measure is additional to normal duties. (whitehouse.gov)
The proclamation carves out extensive exclusions, including certain critical minerals; metals used in currency and bullion; energy and specified natural resources and fertilisers; selected agricultural products; pharmaceuticals and ingredients; certain electronics; passenger vehicles, light and heavy‑duty vehicles and parts; and specified aerospace goods. Goods already subject to Section 232 tariffs are not charged the surcharge in addition, and specified USMCA and CAFTA‑DR entries are excluded. A short “goods in transit” grace applies for consignments loaded before 24 February and entered before 28 February. (whitehouse.gov)
The Supreme Court’s ruling invalidates IEEPA‑based tariffs only. Other trade measures issued under separate statutes remain in force, including industry‑specific tariffs unaffected by the judgment. The proclamation also clarifies that Section 122 surcharges do not stack on top of Section 232 tariffs. (supremecourt.gov)
For UK and other partners, the announced shift to a 15% ceiling under Section 122 would supersede previously signalled 10% arrangements, unless an exemption applies. Several UK‑relevant categories-pharmaceuticals, aerospace goods and defined automotive products-are listed among exclusions, moderating immediate exposure for some high‑value flows. (ft.com)
Business groups moved quickly on refunds for duties collected under the now‑unlawful IEEPA regime. The US Chamber of Commerce welcomed the decision and pressed for “swift refunds,” while the National Retail Federation urged courts to ensure a seamless repayment process to importers. The Court did not prescribe a refund mechanism. (uschamber.com)
In practical terms, refund routes will turn on customs procedure and litigation posture. Importers can file protests with US Customs and Border Protection within 180 days of liquidation under 19 U.S.C. §1514; denied protests can be appealed to the Court of International Trade (CIT) under 28 U.S.C. §1581(a). Some claims may proceed directly under the CIT’s residual jurisdiction, generally within two years of accrual. (cbp.gov)
Scope matters: refund eligibility pertains to duties collected under authorities the Court invalidated-IEEPA tariffs-not to separate regimes such as Section 232 or Section 301. Companies will need to document which payments trace to the struck‑down measures when preparing protests or complaints. (congress.gov)
For trade and finance teams, the immediate tasks before 24 February are operational. Re‑price consignments to reflect the 10% surcharge where no exemption applies; verify HTS lines against the proclamation’s annexes; identify “goods in transit” that qualify for the temporary carve‑out; and update contracts to allocate duty risk. If the rate is formally raised to 15%, repeat the exercise. (whitehouse.gov)
Revenue at stake is material. Law‑firm assessments and government data indicate that more than $130bn had been collected under IEEPA‑based tariffs prior to the ruling, a sum now likely to anchor refund discussions in court and across agencies. Any extension of Section 122 beyond 150 days would require congressional action. (dentons.com)