Written by Patricia E. Langan, Sustainable Supply Chain Advisor to World Collective.

The Trump administration’s tariff effort since 2025 has probably been the most significant shift in global trade in decades. But on Friday Feb. 20, the U.S. Supreme Court  ruled that President Trump does not have the authority to impose what he called “reciprocal tariffs” under the specific law he used.

The Court’s decision that under the specific statue, the International Emergency Economic Powers Act (IEEPA)  of 1977, Congress did not authorize the President to impose tariffs means Trump’s April 2025  “reciprocal tariffs” are illegal and must be ended immediately.  However, this decisive decision, rather than quelling uncertainty, has only stoked it.  

The ruling limits one tool, not the tariff strategy

Many other mechanisms, provided by other laws, do still allow Trump to enact new tariffs, and he spared no time in using one of them on Feb 20, to impose what he said at first would be a 10% across the board tariff on all goods no matter their country of origin, then on Feb. 21 said would be 15%.  By Feb. 23, U.S. Customs and Border Protection issued guidance confirming the rate is 10%.

The Section 122 tariff and the 150-day clock

Given that the law Trump used on Feb. 20, Section 122 of the Trade Act of 1974, sets a 150-day tariff expiration date that can only be extended if Congress approves it, and that tariffs are not popular among voters, the business community is uncertain whether the Section 122 tariff will exist in 9 months by the mid-term elections (November 2026).  

Companies are not sure if reversing moves they’ve made to change sourcing from one country to another or to expand in or repatriate manufacturing back to the US are in their best interests, especially considering the retribution the President could unleash, as he did with US law firms and media companies in 2025.

Even Trump’s use of Section 122 in this case has no precedent, and experts expect it will face court challenges. But there are still other major tariff options authorized by various laws that Trump can use more slowly, but possibly more surely.  

Experts believe Trump will shift the tariff tools he uses, but not his overall tariff strategy, which many see as a way to boost CPB revenue, extract concessions from trading partners and, overall, end the liberal trading order.

The tariff tools include:

• Section 301 of the Trade Act of 1974.  Requires investigations of unfair trade practices and a public comment period before tariffs can be imposed. Implemented by the Office of the US Trade Representative.

• Section 232 of the Trade Expansion Action of 1962.  Requires investigations to evaluate if specific imports threaten national security. Implemented by the US Commerce Department.

One drawback to these tariff tools for the President is that they are less flexible: they may take longer because of mandated procedures such as investigations;  they may cover only specific products, not all products from a country or they may  have an expiration date. However, an advantage is they have been used by every President and are less vulnerable, although not impervious, to challenges in court. 

Global ripple effects and partner agreement risks

As for the impact on other countries, most of the US trading partners had already signed agreements with major concessions to land at a lower reciprocal tariff rate.  Bringing the tariffs to parity at 10% for all countries, no matter the concessions they agreed, may appear unfair and make agreement countries reconsider their commitment. 

For example, both Japan and the European Union agreed to a 15% tariff cap in return for investing huge amounts in the US: Japan agreed to undertake projects totaling $550B in the US; and the European Union agreed to buy $750 billion of American energy and increase investments in the United States by $600 billion. The US-EU agreement however,  has yet to be approved by Parliament and may not come to a vote until March.

Businesses have also been talking about whether the “illegal” reciprocal tariffs they have paid will be reimbursed by the government.  Mechanisms already exist for importers to be reimbursed and are used every day, but certainly not in the volumes or amounts represented by $200B collected by the government under IEEPA as of December 2025. For example, the Ford Motor Company said that their tariff-related charges in 2025 were $2B. However, if they request reimbursement, or sue the government, that will be public and could risk what some are calling retaliation by Trump in the form of regulatory actions he has the power to take.

Overall, experts see that no matter which laws the US uses to impose tariffs or at what rates, it has moved away from free trade principles. We may be in an era for the foreseeable future of tariffs, which reflect a U.S that is more protectionist.  For apparel and footwear the weighted average of tariffs as of November 2025 is 36%, up from  13%  in 2024.  

What companies should do now

Assume that the current U.S. tariff levels on your products, whatever you are importing or from where, will at least stay where they are and will not go back to 2024 levels and a good chance of continued cost volatility. Even if China pricing  becomes more competitive again, stay relatively diversified.