The US Supreme Court annulled most tariffs imposed by Donald Trump under the International Emergency Economic Powers Act (IEEPA) on Friday, in a 6-3 decision limiting its use for trade duties. Hours later, Trump signed an executive order for a 10% global tariff under Section 122 of the Trade Act of 1974, exempting T-MEC products. The measure takes effect on February 24.
The US Supreme Court ruled on Friday, February 20, 2026, that Trump exceeded his authority by invoking the 1977 IEEPA to impose 'reciprocal' and generalized tariffs since April 2025, with minimum rates of 10% on trading partners. The 6-3 decision, including two Trump appointees, invalidated duties such as the 25% on imports from Mexico and Canada for fentanyl, the 10% on China for the same reason, and up to 50% on Brazil and India for political and commercial retaliations. It does not affect steel and aluminum tariffs under other laws like Sections 232 and 301.
In response, Trump signed an executive order from the Oval Office imposing a 10% base tariff on foreign products, effective from February 24 at 12:01 a.m. Washington time. 'It is a great honor for me to have signed a 10% global tariff for all countries, which will take effect almost immediately,' Trump wrote on social media. The measure, under Section 122, lasts up to 150 days and requires congressional approval for extension; it exempts products complying with the T-MEC between Mexico, the US, and Canada.
Trump also ordered investigations under Section 301 for potential additional tariffs on unfair practices, and threatened rates of 15-30% on foreign cars. Treasury Secretary Scott Bessent stated that tariff revenue will not drop in 2026, using alternative legal tools. In Mexico, Economy Secretary Marcelo Ebrard urged 'cool heads' and plans a trip to Washington to clarify impacts, noting that 85% of Mexican exports to the US are tariff-free.
The ruling raises questions on refunds: the Treasury collected $240 billion since April 2025, with possible returns up to $120 billion. Trump called the ruling 'terrible' and said refunds would be a 'disaster.' Markets reacted positively, with the Nasdaq up 0.90% and the Mexican peso appreciating to 17.1366 per dollar.
