US Executive Order — Ending Certain Tariff Actions (terminates all IEEPA-based tariffs after SCOTUS Learning Resources ruling)

Mechanism

The trigger. On 20 February 2026, the Supreme Court ruled 6-3 in Learning Resources, Inc. v. Trump, 607 U.S. ___ (2026), that the International Emergency Economic Powers Act (IEEPA, 50 U.S.C. § 1701 et seq.) does not authorize the President to impose tariffs. Chief Justice Roberts wrote for the majority (joined by Sotomayor, Kagan, Gorsuch, Barrett, Jackson). The Court reasoned that IEEPA's enumerated presidential powers — to investigate, regulate, prohibit, or block transactions in foreign property — do not include the power to set tariffs or duties, which is a textually-distinct congressional power under Article I.

The response. Within hours of the ruling, President Trump signed Executive Order "Ending Certain Tariff Actions" terminating the additional ad-valorem duties imposed under nine prior IEEPA-based executive orders:

The EO directs each executive department head to take "all appropriate steps" to end collection. CBP CSMS # 67834313 operationalised the order: the IEEPA-tariff HTS codes were inactivated in ACE for goods entered for consumption on or after 12:00 a.m. eastern time on 24 February 2026.

The replacement. The same day, the administration issued the paired Section 122 proclamation (filed as 2026-02-20-us-section-122-temporary-import-surcharge) imposing a flat 10% global ad-valorem surcharge under 19 U.S.C. § 2132. Section 122 is a different statutory authority (Trade Act of 1974) with clearer textual delegation of tariff-setting power, capped at 15% ad valorem and 150 days. The pairing converts the IEEPA country-specific 10–125% schedule into a uniform statutory 10% rate under judicially-undisturbed authority.

What is preserved. The order is precise: it terminates only the additional ad-valorem duties imposed under the listed IEEPA EOs. All other actions under those EOs remain in force, and all non-IEEPA trade authorities — Section 232 (national security, Trade Expansion Act of 1962), Section 301 (unfair foreign practices, Trade Act of 1974), Section 122 (BoP surcharge, Trade Act of 1974), and Section 201 (safeguards, Trade Act of 1974) — are explicitly untouched. The underlying national-emergency declarations also remain effective, preserving non-tariff IEEPA tools (asset blocks, sanctions, export controls).

Why severity 5

This is a system-level instrument that recalibrates the entire post-2024 US tariff architecture by removing its single largest legal pillar. IEEPA was the basis for ~$3 trillion of annualised tariff exposure (the Liberation Day reciprocal regime alone covered ~70% of US imports). Replacement under Section 122 cuts that exposure to ~$1.2 trillion at a uniform 10% rate. The move is strictly a legal-pillar swap — it does not represent a strategic policy reversal — but the parametric impact on importer cost-of-goods, downstream pricing, and ETF-level country-of-origin exposure is large enough to qualify as a 5.

This is also the first SCOTUS-driven repeal of a presidential tariff regime in the modern era. The doctrinal precedent (IEEPA does not delegate tariff power) constrains future administrations of either party from re-using IEEPA as a tariff-setting authority — a durable structural change to executive trade-power architecture that outlasts the immediate revenue and trade-flow effects.

Downstream implications

• IEEPA tariff revenue evaporates. CBP IEEPA-duty receipts

collected from 4 February 2025 (EO 14193 effective date) through 23 February 2026 are now unliquidated and subject to refund following SCOTUS vacatur. The IEEPA refund process activated on 20 April 2026 (CBP phase-one refunds) is the operational vehicle.

• Section 232 perimeter becomes the binding instrument. With

IEEPA gone, the Section 232 cascade (eight proclamations covering steel, aluminum, autos, copper, timber, MHDV, semiconductors, critical minerals, pharmaceuticals) is the residual product-level tariff regime. Any new Trump-administration tariff action must now route through Section 232, 301, or 122 — slower processes with statutory findings, comment periods, and (for 232/201) ITC involvement.

• Country-specific exposure largely flattened. Vietnam, Cambodia,

Bangladesh, Myanmar, and other "high-rate" reciprocal countries (paying 36–46% IEEPA reciprocal duties) drop to a flat 10% Section 122 rate — a 26–36 point cut. China drops from 125% IEEPA stack to Section 301 + Section 232 + Section 122 (where applicable). UK and baseline-rate countries (paying 10% IEEPA reciprocal) see no net change — they pay 10% Section 122 instead.

• Doctrinal containment of future presidential trade power.

Future administrations cannot use IEEPA to impose tariffs without Congressional re-delegation. Section 232 (1962), Section 301 (1974), and Section 122 (1974) remain available but are slower and more procedurally constrained. This is structurally favourable for cross-border investment certainty.

• Pairs with Section 122 as the operational replacement. This

action and 2026-02-20-us-section-122-temporary-import-surcharge must be read together. Section 122 has a hard 24 July 2026 sunset unless Congress acts; the IEEPA replacement is therefore not yet durable.

Open questions

• Will the administration attempt to extend Section 122 past the

150-day window via a new statutory pathway, or will it pivot to Section 232 expansion to fill the gap?

• Are the IEEPA-period revenues fully refundable, or will the

administration argue for partial credit/offset against subsequent Section 122 obligations? Track CBP/Treasury guidance on the refund mechanics.

• Will Section 122 itself face constitutional challenge using the

Learning Resources major-questions reasoning? The text of Section 122 is more specific than IEEPA but the "fundamental international payments problems" finding is unprecedented.

• Will Congress codify or repeal the underlying national-emergency

declarations now that the tariff component has been judicially extinguished?