Trade Policy & GDP Research Brief

Supreme Court ruling eliminates IEEPA tariffs. The Supreme Court’s February 20 ruling in Learning Resources, Inc. v. Trump held that the International Emergency Economic Powers Act (IEEPA) does not authorize the executive to unilaterally impose tariffs. In response, the administration imposed a 10 percent global surcharge under Section 122 of the Trade Act of 1974, with a likely increase to 15 percent in the coming days. While this authority is capped at 15 percent and expires after 150 days, it is unclear if the executive can restart the clock via successive orders. Under this framework, the average effective tariff rate is projected to settle between 12 percent and 14 percent—down from the previous 16 percent—as the new order replaces higher duties previously applied to China, Brazil, and non-USMCA imports from Canada and Mexico.