Trump Defies Court, Imposes 15% Global Tariff

A Legal Defeat That Spawned a New Salvo

On February 20, 2026, the U.S. Supreme Court handed President Donald Trump a sweeping defeat in trade policy, ruling 6-3 in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs. Writing for the majority, Chief Justice John Roberts was blunt: "Those words cannot bear such weight." The ruling voided tariffs that had generated an estimated $175–179 billion in revenue, and opened the door to refund claims from importers across the globe.

The White House, however, treated the ruling less as a check on power than as a prompt to find a new lever. Within 96 hours, the Trump administration invoked Section 122 of the Trade Act of 1974 — a rarely used provision that allows the president to impose temporary import surcharges of up to 15% for 150 days to address balance-of-payments deficits. By February 24, a 15% universal tariff on goods from every country was in effect.

Markets Bifurcate Under the Pressure

The financial world's reaction has been sharply divided. Domestic-focused U.S. companies surged: the Russell 2000 small-cap index outperformed the tech-heavy Nasdaq by roughly 9% over 30 days as investors rotated toward firms less exposed to global supply chains. Steel producers like U.S. Steel and Nucor benefited from existing 50% sectoral tariffs on foreign steel. Energy stocks gained 5% on March 2 alone, buoyed by geopolitical turbulence in the Middle East.

But for the big multinationals, the picture is bleak. Apple has absorbed between $800 million and $1.1 billion in quarterly tariff costs. Ford reported $2 billion in losses from tariffs in 2025, while General Motors warned of $4 billion in expenses in 2026. Walmart's February quarterly report included a stark "Tariff Cliff" warning: its inventory buffers are exhausted, and general merchandise prices have already risen 3%.

Gold, a classic safe-haven, surged past $5,300 per ounce, and global equity indices from Tokyo to Frankfurt fell more than 2% in early March trading.

Europe Confronts New Uncertainty

European leaders are in an uncomfortable position. The Supreme Court ruling briefly prompted relief — French winemakers, battered by years of tariff threats, saw a momentary reprieve — but the new 15% levy wiped that sentiment away. The U.S. and EU conducted over $1.5 trillion in trade in 2024, and any broad-based tariff disrupts deeply integrated supply chains.

The European Parliament has twice postponed ratification of a pending transatlantic trade deal, with trade committee chairman Bernd Lange declaring the U.S. had breached its terms. French President Macron urged caution — "Let's not celebrate too soon" — while German Chancellor Friedrich Merz, who flew to Washington with a "unified, coordinated European position," described the Supreme Court ruling as "reassuring" evidence that checks and balances still function in Washington.

Brussels has identified $93 billion in American goods that could face retaliatory tariffs, and has reserved use of its so-called "trade bazooka" — a measure that could restrict U.S. companies' access to the 450-million-person EU internal market.

A 150-Day Clock

The Section 122 mechanism has a hard legal ceiling of 150 days, meaning the tariffs expire by late July 2026 unless Congress acts or new authority is found. Analysts at multiple institutions, including the Peterson Institute for International Economics, describe the window as a high-pressure negotiating period — one in which trading partners must either cut deals or escalate. Comparisons to the Smoot-Hawley Tariff Act of 1930, widely blamed for deepening the Great Depression, have begun circulating in academic and policy circles.

For now, the global trading system is navigating the confluence of two crises: a Middle East conflict that has disrupted energy and shipping markets, and a U.S. tariff regime in legal limbo but operationally aggressive. The 150-day countdown has begun.