On 20 February, 2026, the US Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) did not grant the President of the United States the power to impose new reciprocal tariffs. Consequently, the tariffs established under the IEEPA since the inauguration of Donald Trump (including the “fentanyl” duties on products of Canadian, Chinese, and Mexican origin, and the reciprocal tariffs established by the Executive Order of 2 April 2025, as amended) are invalid.
For past imports, the Court did not rule on the issue of refunds of duties collected. It is therefore up to the Court of International Trade to determine whether and how IEEPA duty refunds should be requested.
Regarding current imports, Donald Trump has activated a new mechanism: Section 122 of the Trade Act of 1974. Distinctions with the reciprocal tariffs are significant: these duties are temporary and subject to Congressional approval; they apply universally. The strategy of individual deals is therefore undermined!
- A 10% “temporary import surcharge”
Based on Section 122, President Trump established a 10% rate of “temporary import surcharge”, which “shall be treated as a regular customs duty”.
Following the model of the previously established IEPPA tariffs, these 10% apply:
– for any release for consumption following importation or withdrawn from warehouse for consumption;
– in addition to any other duties, taxes, fees, exactions, and charges applicable to such products, with the exception of products subject to the tariffs imposed under section 232 of the Trade Expansion Act (for example: steel and aluminum and their derivatives, copper and its derivatives, semiconductors, automobiles and parts of automobiles). Like IEPPA tariffs, they are therefore cumulative with the Most Favoured Nation duties normally in force (‘MFN’ duties), any antidumping duties or with the duties established by application of Section 301 or 201 of the Trade Act – which remain unchanged.
However, unlike the IEPPA reciprocal tariffs, these Section 122’ tariffs are limited to a maximum duration of 150 days, any extension requiring the adoption of a law by Congress once the period expires.
These new tariffs therefore apply from 24 February until 24 July 2026, unless the surcharge imposed in this proclamation is suspended, modified, or terminated, or unless the effective period of such surcharge is extended by an Act of the Congress.
- An undifferentiated application, without consideration of origin
In the same way as the 10% baseline of the Executive order of 2 April, 2025, as amended, the rate of 10% provided by the Proclamation of 20 February, 2026 applies to imports of all products in an undifferentiated manner, without origin consideration.
The invalidation of the IEEPA tariffs therefore de facto undermines the acts formalising the bilateral agreements concluded between the United States and certain of its Aligned partners, as well as the list of exemptions in Annex III, “Potential Tariff Adjustments for Aligned Partners,” of the amended 2 April Executive Order, which identified the tariff codes of the Harmonized Tariff Schedule of the United States (‘HTSUS’) potentially eligible to exemption.
In this context, in a statement on 22 February, the European Commission expressed concern over the potential undermining of the preferential treatment granted to the Union under the EU-US Joint Statement of 21 August 2025 (i.e., the 15% maximum duty rate, including Most-Favoured-Nation duties, and certain exempted sectors).
- Section 122 Duty Exemptions
With regard to exempt products, the model of the Executive order of 2 April, 2025 is similarly adopted, meaning that the products which are not subject to import duties are listed in Annex II of the Proclamation. This latest version largely replicates the products that had been exempted from IEEPA, implying that most of the previous exemptions are reiterated, subject to a few additions or deletions.
Operators must therefore reassess the tariff classification of imported goods in light of Annex II.
For example, the exemptions covered by the Proclamation of February 20 fall into three main categories, namely:
(i) strategic products (including, critical minerals, energy and energy products, natural resources and fertilizers unavailable or produced in insufficient quantities in the United States, pharmaceutical products and active ingredients and certain agricultural products),
(ii) products from certain sensitive industrial sectors (certain electronic products, aerospace products, articles subject to additional import restrictions under section 232 of the Trade Expansion Act of 1962); and
iii) products subject to preferential regimes such as products admitted duty-free under the United States-Mexico-Canada Agreement (USMCA) and textile and clothing articles benefiting from the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR).
- For past imports, the question of refund remains
Regarding the refund of duties paid under IEPPA acts, it is now up to the Court of International Trade (‘CIT’) to determine the appropriate remedy and to specify whether, and under what conditions, the unlawful IEEPA tariffs may be refunded.
These procedures may also evolve depending on the legal framework, as, following the 20 February decision, for example, a bill has been introduced aiming to simplify the process for refunding duties paid.
Pursuant to Cargo Systems Messaging Service (‘CSMS’) # 67823350, U.S. Customs and Border Protection (CBP) is working with other government agencies to fully examine the implications of the Supreme Court decision (SCOTUS) and will therefore provide additional information and technical guidance via the ACE system shortly.