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[PART 1]
Since early 2025, the Trump administration had imposed tariffs on imports from nearly every country in the world. The legal basis was a 1977 law called IEEPA, the International Emergency Economic Powers Act, which allows the US president to regulate commerce during a declared national emergency. Under this authority, the administration applied different tariff rates to different countries. Chinese goods carried effective rates above 30%. Canadian and Mexican goods that did not qualify for duty-free treatment under the North American trade agreement paid 25% or more. The EU negotiated a cap at 15%. More than a dozen other countries signed individual trade deals setting their own specific rates and exemptions. By January 2026, IEEPA tariffs accounted for roughly half of all US customs revenue.
On Friday 20 February, the US Supreme Court ruled 6 to 3 that IEEPA does not give the president the authority to impose tariffs. The power to tax imports, the Court held, belongs to Congress. The ruling invalidated the entire IEEPA tariff structure in a single decision.
Within hours, President Trump signed a proclamation imposing a new 10% global tariff under a different law, Section 122 of the Trade Act of 1974. This law has never been used before. It allows the president to impose tariffs to address balance-of-payments problems, but it is capped at 15% and expires after 150 days, on 24 July 2026, unless Congress votes to extend it. On Saturday 21 February, Trump announced his intention to raise the rate to 15%.
[PART 2]
So what does this mean for business?
For most importers, the immediate effect is lower costs, which is obviously positive. But the ruling creates a much larger problem underneath. The cost of the uncertainty this ruling creates outweighs the benefit of the rate reduction.
Start from who gains right now.
If you import from China into the United States, you were paying above 30%. You now pay 10%. That is a direct reduction in the cost of every container you bring in. It means you can either widen your margins or lower your prices to take market share. The same applies if you source from Canada or Mexico outside the duty-free categories, where rates dropped from 25% to 10%.
Now, who loses.
If you are a US manufacturer who competed against Chinese imports, the tariff that kept your pricing competitive just dropped from above 30% to 10%. Your foreign competitor's landed cost fell dramatically. And they can ramp volume at the new rate faster than you can cut your own production costs.
If you spent the past year restructuring your supply chain around the old IEEPA rates, those investments are stranded. Moving a supplier from China to Vietnam because Vietnam had a lower IEEPA rate made sense under the old architecture. It no longer does, because the rate is now flat. The factories you onboarded, the contracts you signed, the compliance infrastructure you built, all of it was calibrated to a system that no longer exists. That cost does not come back when the tariff changes. It sits on your books.
And there is a problem that goes beyond importers and domestic producers.
Under IEEPA, the administration negotiated more than a dozen trade deals with specific countries. Those deals set individual rates, product exemptions, and caps tailored to each trading relationship. The new Section 122 tariff ignores all of them. It is one flat rate applied to everyone. So if you are an EU exporter who relied on specific product exemptions negotiated in the EU-US framework, those exemptions no longer apply. The EU has already paused ratification of the deal. India has paused its own.
On top of that, roughly $175 billion in IEEPA tariffs were collected over the past year. The Court's ruling means they were collected without legal authority. If you paid those tariffs, you may be entitled to a refund. Over a thousand businesses had already filed claims before the ruling. But the administration has signalled it will resist, and the refund process has not been defined.
Now here is the question that matters most.
Section 122 expires on 24 July 2026. The administration has said it will open investigations under Section 301, a US trade law that allows tariffs in response to unfair foreign trade practices. But that process requires formal proceedings, consultations, and public comment periods. It takes months. So the current 10% rate has a legal shelf life of 150 days, and its replacement does not yet exist.
Here is what to take away.
In the past twelve months, the US tariff system has been fundamentally rewritten three times. Each time, companies treated the new rates as stable and rebuilt around them. Each time, the structure was replaced. Tariff policy in the United States is no longer a fixed input in your cost model. It is a volatile one. And you manage volatile inputs differently. Concretely, that means maintaining active supplier relationships in more than one jurisdiction so you can shift volume without months of onboarding. It means keeping contracts shorter with flexibility clauses rather than locking in terms built around a single rate. And it means pricing your products with enough margin to absorb tariff movement rather than passing through every shift to your customers. The companies that will manage this period best are the ones that treat tariff exposure the way they already treat currency exposure: as a risk to be managed continuously, not a number to be optimized once.

In each episode, we break down the key global economic event that shaped the past seven days and analyze what it means for business.

In this episode: US Supreme Court Strikes Down Trump Tariffs. With Glenshore's Managing Director Amine Laouedj.

Date of recording: 23 February 2026

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