Trump Raises Global Tariffs to 15% After Court Defeat
Hours after the U.S. Supreme Court struck down his IEEPA tariffs in a 6-3 ruling, President Trump unveiled new 10% global tariffs under a 1974 trade law — then raised them to 15% the following day, sending fresh shockwaves through global markets and trade networks.
A Ruling, a Pivot, an Escalation
In the span of 48 hours, the global trading order shifted twice. On Friday, February 20, 2026, the U.S. Supreme Court delivered a landmark 6-3 ruling against President Donald Trump, declaring his sweeping tariffs imposed under the International Emergency Economic Powers Act (IEEPA) unlawful. By Saturday evening, Trump had already found a replacement legal vehicle — and was pushing it to its statutory limit.
"Based on two words separated by 16 others in IEEPA — 'regulate' and 'importation' — the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time," Chief Justice John Roberts wrote in the majority opinion. "Those words cannot bear such weight."
The ruling, authored by Roberts and joined by Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson, invalidated what had become a cornerstone of Trump's economic policy — tariffs that had generated roughly $30 billion per month in federal revenue, quadruple pre-administration levels, according to NPR.
Enter Section 122 — A 1974 Workaround
Trump moved with unusual speed. Hours after the ruling, he announced a new 10% universal tariff on all U.S. imports, citing Section 122 of the Trade Act of 1974. That provision allows the president to address "large and serious" balance-of-payments deficits by imposing temporary levies — capped at 15% — for up to 150 days, without requiring congressional approval upfront.
By Saturday, Trump pushed the rate to the legal ceiling. "I, as President of the United States of America, will be raising the 10% Worldwide Tariff to the fully allowed, and legally tested, 15% level," he posted on Truth Social, per CNBC. The new tariffs are set to take effect on February 24, 2026.
Legal Cracks Already Visible
Experts are already questioning whether Section 122 holds up any better than IEEPA did. The statute's legal trigger — a genuine balance-of-payments deficit — may not actually exist. Economist Peter Berezin noted that "Section 122 of the 1974 Trade Act does not apply in the current macro environment," while trade expert Alan Reynolds pointed out that the U.S. trade deficit is fully offset by a capital account surplus, meaning no true balance-of-payments imbalance exists to justify the measure.
The 150-day ceiling is another constraint. Without a congressional vote to extend them, the tariffs expire automatically — effectively turning them into a countdown clock for a new legislative or legal battle.
Shock Across Global Supply Chains
The economic stakes are substantial. According to the IMF, a universal 10% increase in U.S. tariffs — if met with retaliation from the eurozone and China — could reduce U.S. GDP by roughly 1% and global GDP by around 0.5% through the end of 2026. At 15%, those figures could worsen.
China faces the sharpest combined blow. After the IEEPA tariffs are stripped away, Trump's new 15% global levy stacks onto existing duties, bringing China's effective total rate to approximately 35%, according to analysis cited by Tax Foundation. The European Union, which had previously struck a deal pegged to an IEEPA-based 15% rate — now invalidated by the court — faces renewed uncertainty about its trade relationship with Washington.
Meanwhile, domestic economic data undercuts the tariff rationale. Despite Trump's promises of a manufacturing renaissance, U.S. factories shed 108,000 jobs in 2025, with managers reporting that rising component costs from tariffs offset any competitive advantage, per NPR's analysis.
What Comes Next
The administration has signaled that the 15% rate is not the endgame. Trump indicated that "during the next short number of months, the Trump Administration will determine and issue the new and legally permissible Tariffs" — suggesting Section 122 is a bridge, not a destination.
Analysts and trading partners are now watching whether the EU, China, and emerging markets will respond with coordinated retaliation, or hold fire during the 150-day window. What is clear is that the Supreme Court's rebuke, far from ending the tariff era, may have only reshaped its legal armor — leaving global trade in a state of prolonged, high-stakes uncertainty.
