As we are aware, on February 20, 2026, the US Supreme Court ruled that President Donald Trump cannot impose tariffs based on the IEEPA. This ruling effectively invalidated all reciprocal tariffs previously established by the President, leading US Customs to announce a cessation of these collections starting February 24. However, immediately following the court's move, President Trump signed an executive order imposing a 10% import tariff on all goods under Section 122 of the Trade Act of 1974, subsequently raising it to 15% just one day later.

On the surface, the Supreme Court's ruling appears to significantly reduce the tariff burden many countries face when exporting to the US. In reality, not all nations benefit equally. While the previous reciprocal tariffs seemed high, they were applied selectively and were subject to negotiation. In contrast, the new 15% tariff covers nearly all categories of goods. Consequently, some countries actually find themselves facing higher effective tax rates than before.

Beyond the increase in actual tax payments, the return of tariff instability is even more severe. Previously, nations dealt with fixed rates and focused on negotiating them down. Currently, tariffs under Section 122 are only valid for a maximum of 150 days. The ambiguity surrounding what happens after this period causes more damage to businesses than the high tariffs themselves.

In this climate, affected nations like Vietnam face critical strategic questions. While China calls for a simultaneous removal of tariffs and may halt soybean purchases under preliminary agreements, the EU is urging Washington to respect last year's commitments. Elsewhere, India has delayed negotiations, and Malaysia and Indonesia report that their tax agreements with the US remain unratified. Most countries are opting for a "wait and see" approach—a logical move given that Trump is unlikely to let his favorite political tool slip away. Any direct confrontation could be recorded and met with future retaliation.

ALTERNATIVE TOOLS

President Trump still possesses several legal loopholes to erect new barriers, though the procedures are more complex. Besides Section 122, Section 338 of the Tariff Act of 1930 allows for broad tariffs but is vulnerable to court challenges due to a lack of precedent. Conversely, tools like Section 232 of the Trade Expansion Act of 1962, or Sections 201 and 301 of the Trade Act of 1974, offer firmer legal ground. Although these require narrower application—targeting specific countries or industries—and necessitate investigations proving harm to US interests, they carry strong historical precedents.

These options were specifically outlined by Supreme Court Justice Brett Kavanaugh in a "dissenting opinion," a document that essentially provided a roadmap for Trump, which the President subsequently quoted on social media. My assessment is that the Trump administration will utilize broad-based tax laws to "buy time" for legal maneuvers, ultimately leading to more permanent and robust tariff measures.

IEEPA REMAINS RELEVANT

While the Supreme Court ruled that Trump cannot use IEEPA for tariffs as a trade regulatory measure, it simultaneously affirmed other regulatory powers he can exercise, such as quotas, technical barriers, and import licenses. President Trump highlighted this on Truth Social. It is highly probable that he will use these measures as leverage to force countries back to the negotiating table.

Overall, the Supreme Court's rejection of IEEPA-based reciprocal tariffs does not bring much optimism to the world. Aside from a short-term reduction in rates, Trump's subsequent actions are likely to create more instability and complications for the global economy.