Trump Signs 10% Global Tariff Executive Order: A Shift in Trade Policy Following Judicial Setback

On the afternoon of February 20, 2026, in the West Wing Press Briefing Room of the White House in Washington, D.C., U.S. President Donald Trump stood behind the podium and announced that he would sign an executive order imposing a 10% global tariff on almost all trading partners. Just hours earlier, the U.S. Supreme Court had voted 6-3 to overturn his previous tariff system, which had been implemented under the International Emergency Economic Powers Act. This clash between presidential executive power and judicial review involves potential tariff refunds exceeding $170 billion and also signals that trade policy in Trump’s second term is entering a more uncertain phase.

The Supreme Court ruling and the White House's immediate response

At 10 a.m. on February 20, Chief Justice John Roberts of the Supreme Court read the ruling, clearly delineating the boundaries of executive power. The decision held that the International Emergency Economic Powers Act, passed in 1977, does not authorize the president to unilaterally impose tariffs, and that the reciprocal tariffs implemented by the Trump administration on April 2, 2025, exceeded the scope of the law. This opinion, authored by Roberts, was supported by three liberal justices (Ketanji Brown Jackson, Elena Kagan, Sonia Sotomayor) and three conservative justices (Amy Coney Barrett, Neil Gorsuch, John Roberts). Dissenting were three conservative justices: Brett Kavanaugh, Samuel Alito, and Clarence Thomas.

Notably, both Barrett and Gorsuch, who voted in favor, were nominated by Trump during his first term. The ruling includes a passage that directly addresses the issue of checks and balances: allowing the government to continue its tariff agenda would replace the historical collaboration between the executive and legislative branches on trade policy with unchecked presidential decision-making. Data shows that under the overturned tariff order, the U.S. Treasury has collected at least 130 billion dollars in tariffs, with tariff revenue reaching 34 billion dollars in October 2025 alone.

At 3:38 PM, Trump appeared before the White House press corps. He first launched a fierce attack on the Supreme Court, claiming that certain justices were highly unpatriotic and disloyal to our Constitution, even suggesting they might be influenced by foreign interests. But he quickly shifted his tone, announcing that he would turn to Section 122 of the Trade Act of 1974—a legal provision never invoked by any U.S. president before. This clause allows the president to unilaterally impose tariffs of up to 15% without congressional approval, with a validity period limited to 150 days. Trump said: "I will take a different path, perhaps the one I should have taken from the beginning, and it is more powerful than our initial choice."

Switching of the Legal Toolbox and Policy Continuity

Switching from the International Emergency Economic Powers Act to Section 122 of the Trade Act of 1974 is not a simple substitution of legal provisions. The former, based on broad authority under a national emergency, has been used to freeze foreign assets and impose financial sanctions; the latter, however, is explicitly a trade policy tool, designed initially to address specific situations such as severe balance-of-payments imbalances. Jennifer Hillman, a professor of trade law at Georgetown University Law Center, points out that since its enactment in 1974, Section 122 has never been invoked by any of the six presidents, partly due to its stringent restrictions—it must receive congressional action within 150 days, or it automatically expires.

White House officials revealed in a background briefing that the new tariff order will include a series of exemption clauses: specific minerals, natural resources, fertilizers, certain agricultural products such as citrus and beef, pharmaceuticals, some electronic products, and specific vehicle categories will be exempt from the 10% tariff. Under the United States-Mexico-Canada Agreement, most goods exported to the United States from Canada and Mexico will continue to enjoy exemptions. However, partners such as the European Union, the United Kingdom, and India, which have trade agreements with the United States, will be subject to the new global tariffs, with the preferential rates previously negotiated through talks temporarily suspended.

Trump also announced the launch of a new round of investigations based on Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962. The former targets unfair trade practices and served as the legal basis for imposing tariffs on Chinese goods during his first term; the latter, justified on national security grounds, was previously used to levy tariffs on steel and aluminum products. This multi-pronged strategy reflects the core approach of the White House trade team: when one path is blocked by judicial rulings, an alternative path is immediately activated to maintain pressure on trade partners. Chad Bown, a senior fellow at the Peterson Institute for International Economics, analyzed that this strategy creates ongoing uncertainty, forcing businesses to treat the sudden shifts in U.S. trade policy as a core risk factor when planning their supply chains.

The tension between economic realities and political narratives.

At a press conference, Trump emphasized that the new tariffs will protect our country and bring thousands of jobs. However, existing data paints a more complex picture. According to figures released by the U.S. Department of Commerce on February 19, the U.S. goods trade deficit expanded from $1.20 trillion in 2024 to $1.24 trillion in 2025. Although the overall trade deficit (including services) slightly decreased from $903 billion to $901 billion, the widening goods deficit indicates that tariffs have not fundamentally altered U.S. consumption patterns or the structure of global supply chains.

A key contradiction lies in who actually bears the tariffs. While U.S. tariff schedules are technically imposed on foreign exporters, the economic consensus holds that the cost of tariffs is primarily passed on through higher import prices, ultimately falling on American businesses and consumers. The coalition "We Pay the Tariffs," representing over 800 companies, issued a statement immediately after the ruling demanding a full, swift, and automatic refund of the overturned tariffs. Major retailer Costco had already filed a lawsuit in 2025 challenging the legality of the tariffs and seeking refunds. When asked about refunds, Trump acknowledged that this would become a subject of court litigation for years to come.

The deeper impact lies in the adaptability of the global trade system's rules. The tariffs implemented during Trump's first term have already prompted many companies to reconfigure their supply chains, shifting some production from China to countries like Vietnam and Mexico. The global tariffs in April 2025 further accelerated this process. Today, even if the Supreme Court overturns some tariffs, these supply chain shifts based on geopolitical risk assessments will not easily reverse. Alexander Capri, a trade policy expert at the National University of Singapore, points out that businesses recognize U.S. trade policy has become a highly volatile variable, leading them to prefer building diversified, shock-resistant supply chain networks—even if this means higher short-term costs.

Institutional Checks and Balances and the Protracted Battle of "Trumpism"

The confrontation on February 20 was, in essence, a stress test of the Trumpist governance model by the U.S. system of separation of powers. Since Trump's second term, the conservative majority (6-3) in the Supreme Court has generally been tolerant of his expansion of executive power, particularly in immigration policy and federal government restructuring. However, in this tariff case, two of the three conservative justices appointed by Trump (Barrett and Gorsuch) joined the camp that sought to limit presidential power. This sends a signal: even ideologically aligned judges maintain an institutional wariness toward the unchecked expansion of executive authority.

However, Trump's immediate response—announcing an alternative plan within hours—also highlights the depth of the modern presidential power toolkit. Through executive orders, creative interpretation of existing legal provisions, and persistent legal challenges, a president determined to reshape trade policy can create a continuous stream of policy facts, forcing courts, Congress, and trade partners into a constant state of reaction. William Galston, director of governance studies at the Brookings Institution, argues that this pattern generates regulatory fatigue, which may ultimately compel all parties to accept a new normal with an overall higher level of tariffs.

From a strategic perspective, the ultimate goal of Trump's trade agenda may extend beyond economics. By repeatedly demonstrating his willingness to challenge existing rules and institutional constraints, and proving to his supporters that the deep state (including the judicial system) cannot stop his agenda, Trump is also reinforcing his political narrative. In April 2025, when he announced global tariffs, he held a list of dozens of countries, calling it "Operation Liberation Day." This dramatized, confrontational framing of economic policy is a core component of his political brand.

150 days later, when the authorization under Section 122 of the Trade Act of 1974 expires, this game will enter the next round. Will Congress have sufficient motivation and consensus to take action? Will the inflationary pressures triggered by tariffs alter the political calculus? Will allies seek joint legal countermeasures or engage in bilateral negotiations separately? There are no clear answers to these questions at present. The only certainty is that the global trading system is facing a United States that no longer prioritizes stability and predictability as core considerations. The process of adapting to this new reality will be fraught with legal disputes, economic costs, and geopolitical friction.

The lights in the Oval Office of the White House remained on late into the night on February 20. The executive order regarding the 10% global tariff had already been signed, awaiting publication in the Federal Register the following morning. Meanwhile, in the marble halls of the Supreme Court, the justices may already be contemplating the next potential case—perhaps concerning the interpretation of Article 122, or the allocation of that $170 billion refund. This is a race with no clear finish line, where one side continuously creates new realities, while the other strives to define the boundaries of power. The pulse of the global market beats with every legal move made in Washington.