SCOTUS Blocks Trump Tariffs; US Futures Fall

On Wednesday, February 25, 2026, global markets are attempting to find their footing following a seismic shift in U.S. trade policy. In a landmark 6-3 decision on Friday, February 20, the Supreme Court struck down the administration’s “Liberation Day” tariffs, ruling that the President exceeded his authority under the 1977 International Emergency Economic Powers Act (IEEPA).

However, the “relief rally” was short-lived. Over the weekend, President Trump pivoted to a new legal framework (Section 122), signing an executive order for a 15% global import surcharge that officially went into effect yesterday, February 24.

The SCOTUS Decision: Why the Block?

The Court’s majority opinion, led by Chief Justice John Roberts, asserted that the power to levy taxes and tariffs belongs solely to Congress during peacetime.

• The Legal Blow: The ruling effectively invalidated nearly $175 billion in collected duties, though it left sector-specific tariffs (like those on steel and aluminum under Section 232) untouched.

• The Response: The President labeled the justices “fools” and “lapdogs” on Truth Social, while Treasury Secretary Scott Bessent signaled that the administration would continue to collect equivalent revenue through more “convoluted” but legally defensible means.

Market Impact & “Section 122” Volatility

US futures and major indices have struggled this week as the reality of a “reloaded” trade war sets in. The new 15% surcharge under Section 122 is more restrictive but immediate:

• 150-Day Limit: Section 122 allows the President to impose a surcharge of up to 15% for only 150 days without Congressional approval.

• The Refund Battle: Large corporations, led by FedEx, have already begun filing lawsuits to reclaim the billions paid under the now-illegal IEEPA tariffs.

• Geopolitical Tension: The EU and China have warned of “comprehensive assessments” and potential retaliation if the new 15% rate is applied to existing bilateral trade deals.