Trump Triggers 'Plan B': 10% Global Tariff Imposed After Supreme Court Strikes Down Emergency Trade Powers

A seismic shift has just occurred in U.S. trade policy. Only hours after the Supreme Court issued a ruling blocking emergency trade powers, President Donald Trump immediately struck back by activating a new global tariff order, plunging supply chains into a fresh cycle of volatility.

The Supreme Court Blockade

Last Friday, the U.S. Supreme Court ruled 6-3 that many of President Trump’s previous tariff policies were unconstitutional. The Court found that the President had exceeded the authority granted under the International Emergency Economic Powers Act (IEEPA) by imposing "retaliatory" and country-specific tariffs related to trade deficits and fentanyl enforcement.

Chief Justice John Roberts, writing for the majority, emphasized that IEEPA “contains no reference to tariffs or duties” and cannot be interpreted to grant the President the power to unilaterally impose such sweeping import taxes.

This ruling was seen as a major blow to the emergency-status legal framework that the Trump administration had painstakingly constructed.

"Plan B": Activating Section 122 of the Trade Act of 1974

Refusing to retreat, President Trump announced "Plan B" just hours after the ruling to maintain his protectionist trade agenda. At a press conference, he declared he would sign an executive order imposing a 10% tariff on goods from all nations, citing Section 122 of the Trade Act of 1974.

“Today, I will sign an order to impose a 10% global tariff under Section 122, over and above our normal tariffs already being charged,” Trump stated. He further noted that existing tariffs under Section 232 and Section 301 would remain "fully in place."

Section 122: Old Tool, New Context

Unlike IEEPA, Section 122 provides a more explicit - yet more restricted - scope and timeframe:

●    Maximum Surcharge: Allows for import surcharges of up to 15%.

●    Duration: Valid for a maximum of 150 days, unless an extension is approved by Congress.

●    Purpose: Originally designed in the 1970s as a short-term emergency tool to address trade deficits and balance-of-payments (BoP) pressures.

Notably, this is the first time in history a U.S. President has invoked Section 122 to impose such broad, global tariffs.

An Uncertain Future for Importers

While the Court ruled against the use of IEEPA, it has yet to decide whether importers are entitled to refunds for tariffs already paid. According to data from U.S. Customs and Border Protection (CBP), the now-invalidated tariffs generated approximately $130 billion in revenue as of mid-December 2025. A dissenting judge warned that potential refunds could run into the billions.

In a move toward long-term strategy, the Trump administration also announced plans to initiate additional Section 301 investigations targeting unfair trade practices. This is intended to be a stepping stone toward establishing country-specific tariffs that are more legally resilient.

Separately, national security tariffs under Section 232 - including those on steel and aluminum—remain unaffected by this Supreme Court ruling.

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