Trade and tariff regime

The legal basis of US tariffs changed during 2026. The Supreme Court ruled on 20 February 2026, in Learning Resources v. Trump, that the International Emergency Economic Powers Act does not authorize tariffs (Supreme Court), invalidating the reciprocal and fentanyl duties and leaving open refunds on an estimated $130 billion or more collected (BBC; SCOTUSblog). The administration replaced them within days with a 10% global surcharge under Section 122 of the Trade Act of 1974, which is limited to 150 days without congressional extension; the Court of International Trade ruled against that surcharge in May, and the ruling was stayed pending appeal (CRS). When Section 122 lapsed on 24 July 2026, USTR imposed Section 301 tariffs of 10% or 12.5% on 60 economies for failing to ban imports made with forced labor (USTR; Federal Register). Section 232 duties on steel, aluminum, autos, chips, pharmaceuticals and other sectors sit on top.

This sequence shows how far courts and Congress can constrain the president. The courts removed one statutory basis, and the administration moved to others that delegate more discretion and are harder to challenge. Section 301 and Section 232 are acts of Congress, and Congress can amend them, but any bill narrowing them would face a veto, and Democrats themselves are divided on removing tariffs that some of their voters support. The Democratic majority's realistic tools are oversight of how USTR built the forced-labor findings, pressure on Customs over the pace of IEEPA refunds, hearings on tariff exemptions granted to favored firms, and riders limiting enforcement funds for specific duties.

The executive therefore keeps tariff policy, and the World Trade Organization plays little practical role in disciplining it. Andrew Adair, North America trade policy adviser at the German machinery association VDMA, said the association did not expect national politics to change business conditions in the short term because the tariff agenda rests on executive authorities that remain in place (Reuters). A constrained president may use tariffs more, as the main economic instrument he still controls, both to extract deals before the new Congress sits and to signal that he remains in charge. Pending threats include the 100% tariff on countries with digital services taxes and Phase 2 of the semiconductor tariffs.

For importers, the regime is now more stable legally than in 2025, because Section 301 and 232 actions require procedural records and survive judicial review more easily, but it is no less political. Refund claims on IEEPA duties and the outcome of the Section 122 appeal are worth tens of billions of dollars to importers and will run through the courts on their own timetable. Country effects are covered in the regional sections.