US Supreme Court Overturns IEEPA Tariffs as White House Moves to Introduce New 15% Global Import Surcharge

Background

With continued developments in US trade policy, please see this week’s key updates in our latest round-up on tariffs, global tax and beyond.

While the temptation was to issue an immediate release on Friday afternoon with an update in respect of the US tariffs, we have held until now to provide an update on the initial development stemming from the Supreme Court ruling, the imposition of tariffs under a new legal measure and the administrative steps that followed which now provides more certainty and clarity to business together with wider political and business reaction

Supreme Court Strikes Down IEEPA Tariff Powers

On Friday 20 February 2026, the US Supreme Court issued its decision concerning tariffs imposed under the International Emergency Economic Powers Act (IEEPA), which generated upward of approximately $130 billion in tariff revenues to date. 

As a reminder, the provisions within IEEPA provides the President with broad economic authorities to address national emergencies declared under the National Emergencies Act, including emergencies such as the fentanyl crisis. President Trump has used IEEPA to implement a broad range of tariffs on nearly all countries across the world, including:

• The baseline 10% rate applying to every country, announced on April 2, e.g. “Liberation Day”, 
• The individualised “reciprocal” tariffs, as an adjustment to the “Liberation Day” tariffs, applying to specific countries,
• Tariffs imposed on China and Canada in respect of the movement of opioids and Mexico in respect to the immigration and the movement of opioids,
• Tariffs imposed on Brazil in respect of content moderation,
• Tariffs imposed on Russia, Cuba and Iran in respect of threats to the United States

It should be noted that other legal measures which President Trump has used to impose sector specific tariffs, such as Section 232, 201 and 301 are outside the scope of this case and are not affected by this ruling.

In its judgement, the U.S. Supreme Court has held that “IEEPA does not authorize the President to impose tariffs.” and President Donald Trump does not have the legal authority to impose tariffs, stating in its 170-page Opinion that IEEPA's grant of authority to "regulate … importation" does not include the power to impose tariffs, emphasising that the power to impose tariffs is "very clear[ly] … a branch of the taxing power" reserved for Congress under Article I of the U.S. Constitution. As a result, the IEEPA-based tariff actions are deemed invalid.

From an implementation perspective, the White House has issued an Executive Order: “Ending Certain Tariff Actions” on 20 February instructing the applicable agencies to “take all appropriate steps to end the additional ad valorem duties”. Stemming from this, US CBP has issued guidance which confirms that the IEEPA tariffs will be removed from 24 February.

Notwithstanding the Court’s ruling, President Trump retains the ability to enact new, targeted tariffs through other legal instruments, including Section 338 of the Tariff Act of 1930, Section 232 of the Trade Expansion Act of 1962, Section 201 of the Trade Act of 1974, Section 301 of the Trade Act of 1974 and Section 122 of the Trade Act of 1974.

IEEPA Refunds

Stemming from the Supreme Court decision, importers who have paid tariffs imposed under IEEPA should be subject to a refund of duties paid. However, importantly, the opinion of the Court did not go into any detail on how such refunds are to be processed, and the mechanism of this refund process is still to be fully clarified with further guidance from CBP expected. 

Ultimately, imports may fall under three categories with the current status of the entry dictating the mechanism for the submission of a refund, whether this is:

• Open entries which have yet to be fully liquidated (e.g. closed).
• Liquidated / closed entries within the statutory protest time period (180 days).
• Liquidated / closed entries not within the statutory protest time period.

Depending on the status of the entry, the mechanism for obtaining a refund may range from an amendment to the customs declaration to initiating legal proceedings in the Court of International Trade. 

What is clear with any form of refund submission is the requirement to have clean data, strong documentation, and clear processes. For EU suppliers, where the import submission was not done in their name, communication with your customers is now key to ensure that the commercial reality of transactions reflects the refunds which will now be due. For EU and Irish based ‘non-US’ established importers, it is crucial to commence the data gathering process in order to be prepared for timely refund submissions. 

New Global 15% Tariff

Following the release of the Supreme Court decision, striking down the IEEPA tariffs, President Trump held an impromptu press conference, announcing that he would be imposing an additional 10% tariff on all imports within a matter of days and stating that “Other alternatives will now be used to replace the ones that the court incorrectly rejected,”. 

Following this press conference, the White House released a proclamation and fact sheet “Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems” outlining the imposition of a global 10% tariff, under Section 122 the Trade Act of 1974, to take effect from 24 February. Importantly, such tariffs can only remain in effect for 150 days before requiring approval from Congress for any extension. 

Further to this, on Saturday President Trump wrote in a Truth Social post: “I, as President of the United States of America, will be, effective immediately, raising the 10% Worldwide Tariff on Countries, many of which have been ‘ripping’ ‌the U.S. off for decades, without retribution (until I came along!), to the fully allowed, and legally tested, 15% level."

While no further Executive Order, Proclamation or Fact Sheet has been released in respect of this increase to 15%, it is expected that such an order will be released before the 24 February date with the 15% rate applying from this point onward in addition to MFN rates, for 150 days, until 23 August. 

In a similar vein to the “Liberation Day” tariffs, this new 15% tariff order outlines several key products, contained in Annex I and Annex II which are excluded from the measure, including: 

• certain critical minerals;
• metals used in currency and bullion;
• energy and energy products;
• natural resources and fertilizers that cannot be grown, mined, or otherwise produced in the United States or grown, mined, or otherwise produced in sufficient quantities to meet domestic demand;
• certain agricultural products, including beef, tomatoes, and oranges;
• pharmaceuticals and pharmaceutical ingredients;
• certain electronics;
• passenger vehicles, certain light trucks, certain medium- and heavy-duty vehicles, buses, and certain parts of passenger vehicles, light trucks, medium- and heavy-duty vehicles, and buses;
• certain aerospace products;
• information materials, donations, and accompanied baggage;
• all articles and parts of articles currently or that later become subject to additional import restrictions imposed pursuant to section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862) (section 232);
• articles that are entered free of duty as a good of Canada or Mexico under the terms of general note 11 to the Harmonized Tariff Schedule of the United States (HTSUS), including any treatment set forth in subchapter XXIII of chapter 98 and subchapter XXII of chapter 99 of the HTSUS, as related to the Agreement between the United States of America, United Mexican States, and Canada; andtextile and apparel articles that are entered free of duty as a good of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, or Nicaragua under the Dominican Republic-Central America Free Trade Agreement.

It is yet to be seen how this new tariff measure will affect the agreements which the US has reached with various trading partners, including the EU, UK and Japan, among others, although the US Trade Representative, Jamieson Greer advised on Sunday that the new tariff levy was separate from agreements which have been struck stating “We’re going to stand by them, We expect our partners to stand by them” in reference to agreements currently in place. 

What is clear is that this new rate of 15% represents a higher rate for some countries which had been only subject to the 10% IEEPA baseline, and a lower rate for other countries which had been subject to significantly higher “reciprocal” tariffs. 

Government Reaction

Unsurprisingly, the Supreme Court decision has generated considerable interest and discussion from governments around the world and the wider business community. 

Following the announcement on Friday, EU Commission Deputy Chief Spokesperson Olof Gill outlined the EU remains in close contact with the US administration and outlined the need for stability, stating “Businesses on both sides of the Atlantic depend on stability and predictability in the trading relationship. We therefore continue to advocate for low tariffs and to work towards reducing them.”

In a statement released on Friday, Minister for Foreign Affairs and Trade, Helen McAtee stressed that “Open, stable and predictable trade remains essential for economic growth, investment and jobs in Ireland.” Additionally, as reported by RTE, Tánaiste and Minister for Finance Simon Harris said “low tariffs are in everyone's interests and, at a European level, we will continue to engage with our US counterparts in order to promote measures that work for all" further stating that "Bilateral trade, investment and economic cooperation deliver enormous economic benefits and we will always work towards that goal."

On Saturday, French President Emmanuel Macron provided his initial thoughts on the decision from the highest court in the US, stating “It is not bad to have a Supreme Court and, therefore, the rule of law,” and “It is good to have power and counterweights to power in democracies,”. 

On Sunday, in a statement released by the European Commission on the judgement of the Supreme Court, the need for clarity was highlighted and on ensuring the terms of the Joint Statement were honoured, with the Commission stating: 

“A deal is a deal. As the United States' largest trading partner, the EU expects the U.S. to honour its commitments set out in the Joint Statement - just as the EU stands by its commitments. 

In particular, EU products must continue to benefit from the most competitive treatment, with no increases in tariffs beyond the clear and all-inclusive ceiling previously agreed.”

Speaking to Politico, Bernd Lange, chair of the European Parliament's trade committee stated that President Trump's imposition of a 15 percent global tariff following Friday's high court defeat is "a clear breach of the deal we had agreed," and further advised, in respect of the ongoing EU legislative proposal to reduce tariffs on a large range of US goods imported to the EU, that "I will therefore propose that we suspend ratification of the agreement for the time being."

US Bill on First Sale for Export

On Wednesday 11 February, two US Senators introduced legislation that would change the way import duties are calculated for imports into the US. 

The Last Sale Valuation Act would assess duties on the final transaction value of goods entering the United States, which could limit or eliminate the use of the so-called “First Sale” rule. According to a press release from Senator Cassidy, the Last Sale Valuation Act would “Ensure that importers pay duties based on the true commercial value of imported goods, rather than artificially low declared values”. 

We are closely monitoring the proposed Last Sale Valuation Act and the responses to it on both the Hill and at the White House.  At this time, while the bill introduction made an impact, so far there are few Senate sponsors and no similar House bill, so any realistic pathway to enactment remains speculative at this time. Although passage in its current form appears unlikely, it will be important to continue monitoring its progress.

We’re here to help you

Keeping up to date with US trade policies, trade agreements and new and existing tariff reviews which may lead to further tariff measures is crucial to assessing the risk to your supply chain and the impact these tariffs may have. Understanding your product portfolio and the impact that tariffs may have on your imports is an important first step. We are here to support your business with this analysis and navigating these choppy waters.