Supreme Court Strikes Down IEEPA Tariffs; Trump Pivots to Section 122

The US Supreme Court’s 6-3 decision to strike down the administration’s use of the International Emergency Economic Powers Act (IEEPA) for broad-based tariffs represents a seismic shift in the legal landscape of American trade policy. By ruling that the executive branch exceeded its statutory authority, the Court has effectively dismantled a primary pillar of the administration’s protectionist agenda, asserting that the power to levy duties remains a constitutional prerogative of Congress. Chief Justice John Roberts, leading a coalition that included conservative Justices Neil Gorsuch and Amy Coney Barrett alongside the Court’s three liberal members, argued that the IEEPA—traditionally used for targeted sanctions and asset freezes—does not grant the President the explicit right to impose sweeping import taxes.

The immediate reaction from the executive branch was one of sharp defiance. Vice President JD Vance characterized the ruling as "lawlessness from the courts," arguing that the decision undermines the administration's ability to protect domestic industries and ensure supply chain resiliency. This rhetoric signals a deepening institutional conflict between the White House and the judiciary, suggesting that trade policy will remain a central battleground for executive power. For logistics and supply chain professionals, the ruling initially appeared to offer a reprieve from IEEPA-based duties, but that window of stability was closed almost instantly by the President’s pivot to alternative legal mechanisms.

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Within hours of the ruling, President Trump announced he would invoke Section 122 of the Trade Act of 1974 to impose a 10% global tariff surcharge.

Within hours of the ruling, President Trump announced he would invoke Section 122 of the Trade Act of 1974 to impose a 10% global tariff surcharge. This move demonstrates the administration’s agility in navigating the complex web of US trade law. Section 122 allows the President to address "serious balance-of-payments deficits" through temporary surcharges of up to 15% for a period of 150 days. While this provides a legal workaround, it introduces a new layer of complexity for global trade. The 150-day limitation creates a "tariff cliff," forcing procurement officers to gamble on whether the administration will find a way to extend these duties or if they will expire, potentially leading to massive swings in landed costs and inventory strategies.

The broader implications for the global supply chain are profound. While the Supreme Court has reined in the use of the IEEPA, other protectionist tools remain firmly in place. The administration confirmed that tariffs under Section 232 (national security) and Section 301 (unfair trade practices) are unaffected by this ruling. This means that the "tariff-on-tariff" environment persists, even as the legal justification for the broadest measures shifts. Companies must now recalibrate their risk models to account for the temporary nature of Section 122 duties, which may lead to front-loading of imports or a shift toward short-term sourcing contracts to avoid being caught by sudden regulatory changes at the end of the 150-day window.

Looking ahead, the focus shifts to the legislative branch and the potential for further litigation. The Supreme Court’s ruling essentially invites Congress to clarify the extent of the President’s trade powers. If Congress remains deadlocked, the administration may continue to cycle through various "emergency" authorities to maintain its trade barriers. For the logistics sector, the takeaway is clear: the era of predictable, long-term trade agreements has been replaced by a regime of "tactical trade," where legal challenges and executive pivots can change the cost of doing business overnight. Analysts should watch for the specific wording of the Section 122 executive order, as its implementation will determine which specific commodities and nations are most at risk during this new 150-day cycle.