Trump's Tariff Retaliation: Global Trade Changes After the Supreme Court Ruling

February 21, 2026, The White House, Washington, D.C. The Supreme Court ruled 6-3 that Trump's comprehensive tariff plan, implemented by invoking the International Emergency Economic Powers Act, is unconstitutional. Less than 24 hours later, Trump announced on Truth Social that, based on another never-before-used law—Section 122 of the Trade Act of 1974—he would increase a temporary global import tariff from 10% to 15%. The maximum rate allowed by this tariff is 15%, effective for 150 days, after which congressional approval is required for an extension. The White House stated that certain goods, such as critical minerals, metals, and energy products, would be exempted.

This opinion, authored by Chief Justice John Roberts and joined by Justices Neil Gorsuch and Amy Coney Barrett, both appointed by Trump, limits presidential executive power and introduces new uncertainties for global trade. It represents a judicial setback for a core economic agenda of Trump's second term.

Constitutional Crisis and Administrative Counterattack

On the morning of February 20, when the Supreme Court's ruling was delivered to the White House, Trump was having breakfast with nearly twenty bipartisan governors. According to informed sources, the president's reaction was one of furious anger. He later described the ruling as deeply disappointing and a disgrace to the nation during a press conference, specifically criticizing Roberts, Gorsuch, and Barrett as fools and followers. He even said: Their families should be embarrassed.

However, the legal setback did not stop Trump from taking action. Within hours of the verdict being issued, he turned to Section 122 of the Trade Act of 1974. This law allows the President to impose tariffs of up to 15% on imported goods within 150 days to address significant and severe harm caused by foreign trade practices to the U.S. economy.

Trump wrote on Truth Social: I, as the President of the United States of America, will immediately raise the 10% global tariff on many countries that have been 'extorting' the United States for decades without punishment to the legally permitted level of 15%. White House Trade Representative Jamison Greer subsequently confirmed on Fox News that the new tariffs will take effect on February 24.

Analysts point out that this is a typical Trump-style response: leveraging all available legal tools to bypass obstacles and maintain the core of the policy. The deeper reason is that tariff revenue has become a crucial fiscal source for the Trump administration. According to the latest government data, relying solely on the IEEPA tariffs, which have been ruled unconstitutional, the U.S. Treasury has collected at least 130 billion dollars. Treasury Secretary Scott Bessent predicted at the Dallas Economic Club that by utilizing the authority under Section 122, combined with potentially strengthened Section 232 and Section 301 tariffs, tariff revenue in 2026 will remain nearly unchanged.

The chaotic situation in global trade.

The Supreme Court's ruling and Trump's swift counterattack have created uncertainty worldwide. The impact varies for different countries.

For countries that have already reached bilateral trade agreements with the United States, the situation is complex. For example, the tariff rates negotiated between the United States and Malaysia and Cambodia are 19%, higher than the new global benchmark of 15%. Trade Representative Greer firmly stated that these countries must continue to comply with the agreements and pay the higher rates. Indonesia's chief negotiator, Airlangga Hartarto, also confirmed that despite the Supreme Court's ruling, the trade agreement signed between Indonesia and the United States on February 20, which sets tariffs at 19%, remains valid. This means that exporters from these countries will face higher barriers compared to others.

On the contrary, for countries that have not yet reached an agreement with the United States, such as Brazil, this may actually become a short-term positive. Brazil previously faced tariffs as high as 40%, which are now expected to temporarily drop to 15%. Brazil's Vice President and Minister of Industry, Geraldo Alckmin, told reporters in Brasília that this ruling strengthens trade negotiations between the two countries, but Brazil and the United States will continue their dialogue. He said that Brazilian President Lula and Trump are expected to meet in March to further discuss trade issues.

Europe's response is one of confusion and vigilance. The European Commission had previously reached an agreement with the Trump administration to cap tariffs on European imports at 15%. The certainty provided by this deal was seen as a key factor in helping the 21 countries of the eurozone avoid a recession last year. The German Chamber of Commerce and Industry stated that uncertainty for German companies operating in the U.S. remains high. Since the U.S. government has other trade restriction tools at its disposal, German businesses must prepare for this. Carsten Brzeski, Global Head of Macro Research at ING, warned that Europe should not misinterpret the situation—this ruling does not bring relief... The legal basis may differ, but the economic impact could be the same or even worse. Bernd Lange, Chair of the European Parliament's International Trade Committee and a German Social Democratic Party member, said he would call for a suspension of the approval process for the EU-U.S. trade agreement, originally scheduled for a vote on February 21, as the new tariff policy raises several issues that need clarification.

In Mexico, one of the United States' most important trading partners, Economy Minister Marcelo Ebrard cautiously stated at a public event: "I don't know how this will end." He mentioned that for Mexico, only some of the tariff measures are related to the IEEPA, while others are not. He recalled that just a year ago, Mexico faced a comprehensive 25% export tariff, and today, as you can see, most of my exports are free from such burdens. The Mexican peso rose after the ruling was announced, but analysts warned that Trump could still use other political levers to pressure Mexico, especially on the eve of the renegotiation of the USMCA.

Domestic Political, Economic, and Legal Aftermath

In China, this tariff dispute quickly evolved into a political struggle. With only a few months left until the midterm elections in November, economic and livelihood issues have become the focus. A Reuters/Ipsos poll concluded this Monday shows that Trump's approval rating on economic handling has dropped to 34%, with disapproval reaching 57%. Affordability remains the top concern for voters. Democrats blame the rising cost of living on Trump's tariffs, and they only need to flip three Republican seats in the House to gain a majority.

The immediate question raised by the ruling is: Should the hundreds of billions of dollars in tariffs already paid by businesses be refunded? The Supreme Court's majority opinion did not provide a clear answer. Justice Brett Kavanaugh pointed out in his dissenting opinion that the refund process would likely be a mess. This sets the stage for future legal battles. Illinois Governor, Democrat J.B. Pritzker, even sent an overdue invoice to Trump for $86.79 billion, claiming it represented the total tariff cost of $1,700 per household for the state's 5.11 million families. Massachusetts Senator Elizabeth Warren criticized the lack of a pathway for the American public and small businesses to recover the funds they had paid, suggesting that ultimately only giant corporations with extensive legal and lobbying teams might secure refunds through litigation.

The business community's reaction is complex. Drew Greenblatt, owner of Marlin Steel Wire Products, a steel processing company in Baltimore, Maryland, expressed great disappointment with the Supreme Court's ruling, viewing it as a setback for America's poor to have the opportunity to join the middle class through quality manufacturing jobs. Meanwhile, John Boyd, a soybean farmer from Virginia and founder of the National Black Farmers Association, believes this is a huge personal victory for me and a major failure for the President. The National Retail Federation, representing millions of American businesses, urged the court to ensure a seamless process for returning tariffs to U.S. importers. Neil Bradley, Chief Policy Officer of the U.S. Chamber of Commerce, stated that quickly refunding illegal tariffs is significant for over 200,000 small importers nationwide and will help support stronger economic growth this year.

Unfinished Battle: Alternative Tools and Future Directions

Despite facing a major setback, Trump's tariff war is not over. He stated on social media that he will use these 150 days to introduce other tariffs permitted by law. The White House intends to rely on two other regulations: Section 232 of the Trade Expansion Act of 1962, based on national security investigations, and Section 301 of the Trade Act of 1974, targeting unfair trade practices. These laws allow for the imposition of import taxes on specific products or countries.

In fact, some key tariffs were not affected by this ruling. Kevin Dempsey, President and CEO of the American Iron and Steel Institute, stated that steel import tariffs imposed under the national security provisions remain in effect. Philip Bell, President of the Steel Manufacturers Association, also confirmed that the Supreme Court's ruling did not overturn the steel tariffs that are revitalizing the U.S. steel industry, strengthening national security, and promoting the creation of high-quality American jobs. This means that Section 232 tariffs on goods such as steel, aluminum, lumber, and automobiles remain effective.

Georgetown University trade law professor Kathleen Claussen analyzed: It's difficult to see any path for tariffs to end here. I am quite confident that he can use other authorizations to reconstruct the existing tariff framework. Cornell University economist Eswar Prasad pointed out that the ruling will severely restrict the Trump administration's ability to aggressively use tariffs without congressional approval, but it is unlikely to stop the government from seeking other avenues to impose tariffs.

From a strategic perspective, this Supreme Court battle marks the beginning of a new phase in the power struggle. It has redrawn the boundaries of authority between the President and Congress, as well as between the executive and judicial branches regarding trade policy, but it has not altered Trump’s determination to utilize all available tools to advance his America-first trade philosophy. The next 150 days will serve as a critical window for Congress, the courts, global trade partners, and American businesses to observe and contend with these developments. Regardless of whether the new tariffs receive an extension from Congress, a more complex, confrontational, and uncertain global trade environment has already emerged. As Allie Renison, a former UK government trade advisor and director at SEC Newgate, noted: While this may seem like a good day for free trade, I believe trade has actually just become much more chaotic.