US tariffs Supreme Court ruling: New trade policy framework emerges

The recent US Supreme Court decision to overturn President Trump’s tariffs under the International Emergency Economic Powers Act (IEEPA) has fundamentally reshaped US trade policy. As we highlighted during a recent Trade Trends webinar, this represents a shift towards a more predictable but elevated tariff environment that companies must navigate strategically.

The Supreme Court ruling and its immediate impact

In February 2026, the Supreme Court struck down the IEEPA tariffs that had generated around USD 27 billion monthly (USD 320 billion annually) for the US Treasury. The court ruled that Congress alone has the constitutional authority to “lay and collect taxes,” including import tariffs, limiting the President’s ability to use IEEPA as a framework for tariff implementation.

This decision doesn’t eliminate tariffs entirely but forces the administration to pursue alternative legal authorities. Treasury Secretary Scott Bessent immediately announced plans to use Section 122, 232 and 301 protocols to maintain revenue levels broadly similar to IEEPA.

Two-phase transition strategy

The administration has implemented a structured approach to replace the overturned tariffs:

Phase 1: The bridge period (February-July 2026)

A 150-day window featuring a flat 10% global tariff under Section 122 authority. This represents an effective tariff rate of 10.5%, the highest since 1943. The bridge includes carve-outs for US-Mexico-Canada Agreement (USMCA)-compliant goods and products that cannot be produced domestically.

Phase 2: The future framework

Section 301 tariffs will replace the temporary measures. Unlike Section 122, these tariffs are uncapped, not time-bound and can be country-specific. Unlike the IEEPA tariffs, they can’t be turned on and off as part of the administration’s dealmaking process with countries.

Major investigations underway

Two comprehensive Section 301 investigations are targeting over 60 of America’s largest trading partners, including the EU, Norway, China, Japan, Korea, India and others:

1. Excess industrial capacity: Examining whether countries produce more goods than they consume domestically, potentially displacing US producers
    
2. Forced labour: Investigating evidence of forced labour practices, including supply chain implications

These investigations are running on an accelerated timeline to ensure new tariffs are ready when the Section 122 bridge expires in July.

Implications for Nordic corporates

The shifts provide greater predictability than the previous IEEPA framework. Section 232 and 301 tariffs are well-established, tested mechanisms that offer more clarity for long-term planning given their “sticky” nature. Once implemented, they typically remain in place for years.

These changes represent a longer-term shift rather than temporary measures. Historical data shows that tariff revenues increased from USD 4.7 billion monthly under the first Trump administration to USD 7.1 billion under Biden, demonstrating bipartisan support for protectionist trade policies.

Key factors supporting this permanence include:

• Substantial revenue generation for the Treasury
   
• Bipartisan political support for increased US manufacturing
   
• No visible plan for tariff removal regardless of future administrations

Recommendations for Nordic companies:

1. Prepare for the new baseline: Plan for 10-15% tariff rates as the standard operating environment
    
2. Review supply chains: Assess exposure to forced labour investigation and excess capacity classifications
    
3. Monitor Section 301 developments: Track the ongoing investigations affecting major trading partners
    
4. Consider strategic positioning: Evaluate opportunities in markets outside the US as countries strengthen alternative trade relationships

Watch a recording of the Trade Trends webinar, "Tariffs on trial: What's next for US trade policy?"